International Financial Reporting Standards (IFRS) does not use historical cost. As we discussed in Chapter 6, historical cost is the original monetary value of an item. For an example, if land was originally purchased one hundred years ago for $50,000, then that land would still be on the books for $50,000. Most importantly this cost is concrete and documented. Instead, IFRS revalues items at their current market value and the capital assets are marked up or down.

1. What is the impact on the Income Statement and Balance Sheet from the IFRS revaluation method?