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Long-lived assets are recorded at historical cost or revalued amount(fair value).IAS NO 16.
This a very good question and still faced big challenged in todays financial world, IFRS said what mentioned above and FASB before request from the big company in USA, to provide a memo with financial statements to show the replacement cost of assets (current price)today, but I thing this will be complicated and depreciation expense will become huge and decrease profit.
On the other hand the company didn't pay the current or market price today! But paid the historical cost appeared in the books.
What is your opinion Renu Jajoo?
Regards,
sherif
