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Revaluation as a Model of Subsequent Measurement of Property, Plant, and Equipment – Case of Croatia

Author

Listed:
  • Mirjana Hladika

    (Faculty of Economics and Business, University of Zagreb, Croatia)

  • Danimir Gulin

    (Faculty of Economics and Business, University of Zagreb, Croatia)

  • Ivana Bernat

    (Faculty of Economics and Business, University of Zagreb, Croatia)

Abstract

Accounting standards allow the application of two models for subsequent measurement of property, plant, and equipment, and those are the cost model and the revaluation model. The application of a certain model depends on the manager’s choice of accounting policy. The main goal of this paper is to investigate the application of the revaluation model for subsequent measurement of property, plant, and equipment in Croatian companies. Further goals are to examine how the fair value for revalued assets is determined, and what the level is of disclosed information about the determined fair value and the revaluation. The theoretical part of the paper analyzes different models for measurement of property, plant, and equipment, the issue of determining fair value, and disclosure requirements according to national and international accounting standards. The empirical part of the paper is conducted on 500 large and medium-sized Croatian companies from the service (utilities), production, and tourism sectors. Particular attention is placed on the notes to the financial statements of these companies. The research covers the period from 2014 to 2018. Collected data are analyzed by using descriptive statistics methods, point-biserial correlation, and Pearson correlation coefficient.

Suggested Citation

  • Mirjana Hladika & Danimir Gulin & Ivana Bernat, 2021. "Revaluation as a Model of Subsequent Measurement of Property, Plant, and Equipment – Case of Croatia," Croatian Economic Survey, The Institute of Economics, Zagreb, vol. 23(1), pages 63-95, June.
    • Handle: RePEc:iez:survey:ces-v23_1-2021_hladika-gulin-bernat
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    revaluation; fair value; property; plant; and equipment; accounting standards; financial reporting;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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