According to IAS 16,there are two method of treating the items of PP&E ;
- Cost model
under Cost model, an item of PP&E will be recorgnized at cost less any accumulated depreciation and accumulated impairment loss.
under revaluation model, the fair value/revaluation amount will be used to recognized the item of PP&E . The increase in the carrying amount as a result of fair value shall be recognized in other comprehensive income as Revaluation surplus.