9 Why does the IASB believe that a principles-based approach to standard setting is superior to a rules-based approach? Detailed guidance or rules encourage accountants to look for ways around the rules rather than trying to provide useful information. Principles-based standard setting is less costly to undertake than rules -based standard formulation. It is desirable to have all corporations in all countries using the same accounting practice. A conceptual framework for standard setting has demonstrated to encourage the greatest economic development. 10 If a company chooses the revaluation model permitted in IAS 16 for fixed asset measurement: annual revaluations must be performed on each class of assets. it must update the valuation so that the balance sheet represents fair value on the balance sheet date. appraisals must be performed by an official of the IASB. the depreciated replacement cost must be used as the fair value of the fixed asset