IAS 16/IAS 38 – Revaluation model and proportionate restatement (new)
The concern is over the word "proportionately" in paragraph 35(a) as a proportionate restatement of accumulated depreciation is not possible in cases where the residual value, the useful life or the depreciation method has been re-estimated before revaluation. The staff has proposed that as the restatement of the accumulated depreciation is not always proportionate to the change in the gross carrying amount, paragraph 35(a) should be amended accordingly. In addition, the proposal has been made to delete the last sentence of paragraph 35(a) of IAS 16 and that paragraph 80(a) of IAS 38 Intangible Assets be amended to reflect changes made to paragraph 35(a) of IAS 16. This request has been made to include this proposed amendment in the 2010-2012 annual improvements cycle.
The Committee agreed with the staff's recommendation to amend paragraph 35 of IAS 16, amend paragraph 80 of IAS 38, and to include these in the annual improvements cycle.