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, COVID-19, TFRS, NPAEs, TFAC, Government Gazette

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.

On 1 July 2020, the Oversight Committee on Accounting Professions approved the option for non-publicly accountable entities to measure and recognize their property, plant, and equipment, as well as investment property, at fair value. In addition, TFAC has already published an example of how to recognize the revaluation surplus and compute the depreciation in the financial statements on its website.

This option is currently in the process of being published in the Government Gazette.

For more information (in Thai) regarding the guidelines, TFAC Announcement one and two dated 7 July 2020.

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