Editing Historical cost (section)

===Revaluation of property, plant and equipment===
Under IFRS it is acceptable, but not required, to re-measure the values of property, plant and equipment at their fair (current) values.<ref>IFRS - IAS16, Property, Plant & Equipment, paragraph 31, IASC</ref>  'Fair value' is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction.  Such a policy must be applied to all assets of a particular class.  It would therefore be acceptable for an entity to revalue freehold properties every three years.  The revaluations must be made with sufficient regularity to ensure that the carrying value does not differ materially from market value in subsequent years. A surplus on revaluation would be recorded as a reserve movement, not as income.