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Future valuations under FRS 102 ?

Is a client prohibited from revaluing PPE in future years ?

If upon transition to FRS 102 a client chooses to treat a previous valuation of an asset under UK GAAP or fair value on transition as the 'deemed cost' so as to avoid future revaluations, what happens if at a future date (say in 3 years) the client then decides that they want to report the asset at valuation again due to a substantial FV increase ??

Obviously this treatment is intended to prevent ongoing revaluations, but the client may wish to adopt a policy of revaluation again in the future - would they be prohibited by FRS 102 due to adopting deemed cost on transition ?

Many thanks.

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By johnt27
15th Feb 2018 10:20

No - there is no restriction on your client using FV in the future.

I think you are confusing the exceptions/exemptions under FRS 102 which allow a client to either break the cycle of revaluations under FRS 15 or book a one time uplift in value at transition.

The only issue with adopting FV in the future is that you then be in the cycle of needing to revisit that as per the requirements of FRS 102.

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to johnt27
15th Feb 2018 12:41

So if the client chooses to adopt FV in the future (say in 3 years) having reverted back to historic cost based on the revaluation undertaken at the date of transition to FRS 102 (deemed cost) what happens about the previous years - do these have to be restated to FV on this basis or just the comparative year ??

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By johnt27
to pdorrington
15th Feb 2018 13:55

No - the FV treatment is prospective so no need to revisit comparatives.

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