Upward Revaluation of Nonfinancial Assets

Should It Be Available in U.S. GAAP?

David Sardone, MBA, and Tom Tyson, PhD

The two most widely recognized sets of accounting standards—U.S. GAAP and IFRS—address the measurement of nonfinancial assets differently, and compelling arguments exist in favor of each approach. Despite the challenges to auditing fair value estimates, some suggest that FASB should conform more closely to current iFRS procedures by allowing the revaluation of certain nonfinancial assets; more specifically, this article's authors propose that FASB should allow the upward revaluation of fixed assets—such as property, plant, and equipment (PP&E)—that have extended economic lives. The following is a description of the current accounting under U.S. GAAP and IFRS, and an argument in favor of extending the IFRS approach to U.S. GAAP.