A new accounting law makes a distinction between primary and subsequent valuations of asset. The concept is meant to ensure that assets are carried at an observable market price. The purchase price was exclusively allowed as a maximum of these balance sheet items.
Distinction is made between:
Initial measurement: Assets are valued most about cost at their initial recognition.
Subsequent measurement: Any subsequent assets are not rated higher than the initial cost. Exceptions are made for individual types of assets which can be assets with observable market prices or inventories.
Consequences of assets with observable market prices:
- An observable market price may be used to value subsequent assets, as stated in the balance sheet date.
- The appendix is used to point out this type of review.
- If at the date of the balance sheet, assets have a market price; impairment is charged on the income allowed to take price fluctuations in the development bill.
The term of "observable market price" must be carefully handled. It’s possible to give an observable market price, it there is a prudential regulation each “market”. For example, the so-called "Eurotax" for vehicles most likely wouldn’t withstand a revision.
The interpretation of observable market price shouldn’t be recommended, since the gains don’t have an operationally related origin.