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QUESTION 10 Accounting standards allow the use of both the historical cost model and the revaluation model because different measurement bases can provide useful information
QUESTION 10 Accounting standards allow the use of both the historical cost model and the revaluation model because different measurement bases can provide useful information to users in different circumstances. Required: A manufacturing company holds large amounts of factory machinery on its balance sheet. The machinery is custom built using specifications that make it unsuitable for use in any other location. For this reason it is unlikely that there could exist a resale market for this machinery Discuss 1. two disadvantages of using historical cost to measure this machinery, (2.5 marks) 2. two disadvantages of using the revaluation model to measure this machinery. (2.5 marks)
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