Cost model = asset is recorded at the initial cost of acquisition and is then subject to amortisation (see section 13.3.3 ) and impairment testing (see chapter 15 ).Revaluation model = asset is recorded at the initial cost of acquisition and is then subject to amortisation (see section 13.3.3 ) and impairment testing (see chapter 15 ).Selection of the revaluation model requires all assets in the one class to be measured at fair value. Because of the insistence on using active markets for the measurement of fair value, the standard recognises that there will be cases where fair values cannot be determined for all assets within one class. Hence, under paragraph 81 of IAS 38, where there is no active market for an asset, the asset can be measured at cost even if the class is measured using the revaluation model. Further, if the ability to measure the asset at fair value disappears because the market for the asset no longer meetsthe criteria to be classified as active, the asset is carried at the latest revalued amount and effectively accounted for under the cost model. If the market again becomes active, the revaluation model can be resumed.
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Accounting for intangible assets measured using the revaluation model is exactly the same as for property, plant and equipment (see chapter 11 ). Where there is a revaluation increase, the asset is increased and the increase is credited directly to a revaluation surplus. However, if the revaluation increase reverses a previous revaluation decrease relating to the same asset, the revaluation increase is recognised as income (IAS 38 paragraph 85). Any accumulated amortisation is eliminated at the time of revaluation. Where there is a revaluation decrease, the decrease is recognised as an expense unless there has been a previous revaluation increase. In the latter case, the adjustment must first be made against any existing revaluation surplus before recognising an expense (IAS 38 paragraph 86). Any accumulated amortisation is eliminated at the time of the revaluation.13.3.2 Subsequent expenditures.Paragraph 20 of IAS 38 discusses subsequent expenditures in general. It is argued in this paragraph that the unique nature of intangibles means that subsequent expenditures should be expensed rather than capitalised. Subsequent expenditures maintain expected benefits rather than increase them. Subsequent expenditures on intangible assets are always expensed.13.3.3 Amortization of intangible assets.A key determinant in the amortisation process for intangible assets is whether the useful life is finiteor indefinite.Finite the asset has to be amortised over that life.Indefinite no annual amortization charge.An entity shall assess whether the useful life of an intangible asset is finite or indefinite and, if finite, the length of, or number of production or similar units constituting, that useful life. An intangible asset shall be regarded by the entity as having an indefinite useful life when, based on an analysis of
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