Most assets on an entity’s balance sheet are shown at cost. This will be either the historical purchase or construction cost or fair value treated as deemed cost. The latter arises either through the acquisition of the asset in a business combination (when all acquired assets are required to be shown at their fair value at the date of acquisition) or on transition to IFRS where entities are permitted to bring in certain assets at fair value which is then ‘cost’ going forward. Assets that are carried at fair value and regularly revalued are outside the scope of IAS 36 as any impair-

ment is clearly recognized in the regular valuations.