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Question Four Thaba Limited was formed on 30th November 2013. On 1st January 2014 it...

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Question Four Thaba Limited was formed on 30th November 2013. On 1st January 2014 it acquired its first item of plant for K400,000. The plant will be used in the manufacture of a soft drink called 'Nicee'. Being a new company, it has not yet decided on the policy to adopt regarding subsequent measurement of property, plant and equipment. The director of Thaba Limited has read that there are two methods that are provided for in IAS 16 'Property, plant and equipment' as regards to subsequent measurement of property, plant and equipment. However, he does not know the difference between the two methods with respect to how and when they are applied, and how they affect the financial statements. Required Describe cost model and revaluation model as subsequent measurement methods of valuing property, plant and equipment, in accordance with IAS 16. 10 Marks

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