Revaluation

The International Accounting Standards Board (IASB) issued its “Framework for the Preparation and Presentation of Financial Statements” which was approved by the IASC in April 1989 and then adopted by the IASB in April 2001. The IASB Framework sets out the concepts that shape the preparation and presentation of financial statements for external users. The basic purpose of the IASB Framework is to provide assistance and guidance to the IASB in developing new or revised standards in addition to assisting the preparers of financial statements in applying the standards and dealing with issues which are not explicitly dealt with by the standards. However, the Framework does not have the force of an IFRS. Therefore, in case of a conflict between the Framework and an IFRS, the IFRS should be followed.

The Framework comprises seven section which cover areas as:
• The objective of financial statements (provide information about financial position, performance, and changes in financial position)
• Underlying assumption (accruals basis and going concern)
• Qualitative characteristics of financial statements (understandability, relevance, reliability, comparability)
• The elements of financial statements (assets, liabilities, equity, income, expenses)
• Recognition of the elements of financial statements (it is probable that any future economic benefit related to the item will flow to or from the reporting entity; the item has cost or value that can be measured reliably)
• Measurement of the elements of financial statements ( historical cost, current cost, realisable value, present value)
• Concepts of capital and capital maintenance (financial concept of capital, physical concept of capital)

The Conceptual Framework and IASB’s Framework for Preparation and Presentation of Financial Statements have impacted not only the accounting for an item on the Financial statements but also the overall financial statements such as historical cost for assets. The historical