Research topic: Historical cost versus fair value accounting for non-financial assets (Word limit: 3000 words

The choice between fair value and historical cost accounting has been a widely debated issue in the accounting literature (Christensen & Nikolaev, 2013). However, the conceptual framework for international financial reporting (hereafter the IASB Framework) and the equivalent AASB Framework does not prescribe a specific measurement base to account for the key elements in financial reports (the IASB Framework 2010). Specific measurement methods for different accounting elements are provided in the specific international financial reporting standards (IFRS). Unlike most other accounting standards, IFRS provides a free choice between fair value and historical cost accounting for the non-financial asset groups: property, plant and equipment (PPE) (see IAS 16) and intangibles (see IAS 38). This has resulted in variations in valuation practices for PPE and intangible assets.


  1. Refer to the current IASB Framework and IFRS 13 Fair Value measurements, briefly explain the measurement concepts in relation to historical cost and fair value accounting.
  2. Evaluate the benefits and challenges of using historical cost and fair value accounting for PPE and intangibles, by reviewing accounting literature.
  3. Identify valuation practices (in relation to the use of historical cost and fair value accounting) for the following non-financial asset groups: PPE and intangibles, by reading the ‘accounting policy’ sections of three listed companies’ 2016 annual reports.

Note: You are required to select one company listed London stock exchange, one company listed on the New York Stock Exchange, USA, and the third one is selected from the Australian Securities Exchange.

  1. Analyse if the valuation practices for PPE and intangibles are consistent across the three companies.
  2. What is your opinion on the free choice between historical cost and fair value accounting for PPE and intangibles: should such free choice be continued in practice? Or should it be abandoned? Justify your answer.


Christensen, Hans B. & Nikolaev, Valeri V., (2013). Does fair value accounting for non-financial assets pass the market test? Review of Accounting Studies, 18(3), pp 734-775.

Missonier-Piera, Franck., (2007). Motives for fixed-asset revaluation: An empirical analysis with Swiss data, The International Journal of Accounting, 42(2), pp186–205.

IASB Framework, IAS 16, IAS 38, IFRS 13, retrieved from

AASB Framework, AASB 116, AASB 138, AASB 13, retrieved from

Australian Securities Exchange,

New York Stock Exchange,

London Stock Exchange,

Submission requirement

  1. Assignment submission
    1. Submission of this assignment by due date is compulsory for the successful completion of the subject.
    2. The word limit is no more than 3000 words (excluding references and appendix)
    3. The submitted hardcopy of the assignment must be the identical version of the electronic copy submitted through the Dropbox (i.e. Turnitin) on VU Collaborate. Inconsistence in the hardcopy and the electronic copy may result in a zero mark of the assignment.


Note: If you cannot submit your assignment through the Dropbox on VU Collaborate due to technical issue, then email your assignment to your tutor or lecturer no later than the due date.

  1. The Turnitin/Dropbox Similarity Report should be no more than 20%.
  2. Late submission without the extension approval from your tutor will be penalised at two marks (out of 20) per calendar day (including weekend).
  3. Completed extension application form must be submitted to your tutor at least five days in advance of the due date.
  4. Students are responsible to protect their work and save data by making necessary backup. Loss of data due to a computer or storage devices problems will not be considered a legitimate reason for an extension.


  1. Referencing and style


  • Assignment must be typed using Word document, with double alignment, and 1.5-lines space.
  • Assignment is required to use Harvard referencing style (see VU library for examples of Harvard Referencing Style at
  • Assignment without proper referencing (in text and end of text) will be subject to substantial deduction of marks. This may result in the assignment being marked zero.


  1. Preventing plagiarism


3.1 Academic Honesty and Preventing Plagiarism Policy


Plagiarism is defined as ‘The practice that involves use of another person’s intellectual output and presenting it (without appropriate acknowledgement) as one’s own’.


Examples of plagiarism:

  • Word-for-word copying of sentences/paragraphs in an assignment without acknowledgement or with insufficient or improper acknowledgement;
  • Downloading essays or assignments from the web and presenting these for assessment;
  • Presenting another student’s work or research data as the student’s work;
  • Copying out parts of any text without acknowledging the source(s). This may be written text, structures within texts, diagrams, formulae, sound files, still photographs, audio-visual material (sound and image files), graphics/animations/multimedia objects, other computer based material, mathematical proofs, art objects, products and others. This can be done as verbatim copying or paraphrasing.
  • The use of someone else’s concepts, experimental results, experimental conclusions or conclusions drawn from analysing evidence or arguments without acknowledging the originator of the idea(s) or conclusion(s).

3.2 Students are responsible for:

  • Understanding and respecting the University’s policies and procedures regarding plagiarism, collusion, and other forms of academic misconduct, and as such should only submit work for correction or academic credit that is their own or that properly acknowledges the ideas, interpretations, words or creative works of others;
  • Avoiding the lending or making accessible original work to others;
  • Being clear about the appropriate referencing rules that are applicable to their field of study;
  • Refusing to be a party to another student’s efforts to undermine the academic integrity of the University.
  • Seeking assistance with their learning and assessment tasks if they are unsure of appropriate forms of acknowledgement.

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