Revaluation model for property, plant, and equipment, as well as investment property for non-publicly accountable entities
As a result of the COVID-19 pandemic, the Federation of Accounting Professions (TFAC) has evaluated the effect that it might have on non-publicly accountable entities. One issue that TFAC is aware of is the accounting principles for recognizing property, plant, and equipment, as well as investment property as assets under the Thai Financial Reporting Standards for Non-Publicly Accountable Entities (“TFRS for NPAEs”).
Keywords: Mazars, Thailand, Accounting, TFRS, NPAEs, TFAC, COVID-19
24 July 2020
The TFRS for NPAEs do not allow property, plant, and equipment, or investment property, to be revalued at their fair value. All such items must be measured after initial recognition using the cost model – cost less any accumulated depreciation and any accumulated impairment losses. As a result, the financial statements of the entity do not provide a truly accurate fair value of property, plant, and equipment, as well as investment property, do not reflect the real value of the business, and do not present a clear picture of the Company’s financial position.
Currently, TFAC plans to issue an option to allow NPAEs to revalue their property, plant, and equipment, as well as investment property, and to recognize such assets at the revalued amount, being the fair value at the date of revaluation less subsequent depreciation and impairment, provided that the fair value can be measured reliably.
The Committee of the Federation of Accounting Professions is currently discussing this issue.