Question: Short Answer Question 3 - Accounting for PPE (Answer length - approximately 100 words) According to AASB 116, management may change the measurement basis for

Short Answer Question 3 - Accounting for PPE

(Answer length - approximately 100 words)

According to AASB 116, management may change the measurement basis for property, plant and equipment, for example from cost to fair value. However, there are certain disincentives to adopting the revaluation model.

Required:

Explain two reasons why the cost model would be preferred over the revaluation model. (4 Marks)

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