Revaluation applies to assets with reliable fair value measurements

Steps:

• Identify revaluation method: Under IAS 16, it's used for PPE where fair value can be reliably measured, adjusting carrying amount periodically.
• Assess asset types: Non-current assets like tools, vehicles, equipment, and machinery qualify if revaluation is elected.
• Evaluate likelihood: Choose asset most prone to value changes needing revaluation for accurate depreciation base.
• Select best fit: Loose tools often require revaluation due to frequent wear and replacement cost adjustments.

Why A is correct:

• Loose tools are inventoried assets with volatile replacement values, depreciated via revaluation to reflect current costs per inventory valuation standards.

Why the others are wrong:

• B: Motor vehicles use straight-line depreciation based on historical cost, as values are predictable via market data without frequent revaluation.
• C: Office equipment depreciates evenly over useful life using reducing balance, not revaluation, due to stable low-value nature.
• D: Plant and machinery typically employs units-of-production method tied to usage, avoiding revaluation unless specialized.

Final answer: A