Ias 16 Upl
IAS 16, Property, plant and equipment
By Graham Holt
Studying this technical article and answering the related questions can count towards your verifiable CPD if you are following the unit route to CPD and the content is relevant to your learning and development needs. One hour of learning equates to one hour of CPD. We 'd suggest that you use this as a guide when allocating yourself CPD units.
Property plant and equipment (PPE) are tangible assets that an entity holds for its own use or for rental to others, and that the entity expects to use during more than one period. PPE could be constructed by the reporting entity or purchased from other entities.
Biological assets, intangible assets and investment property are not PPE. Neither are investments in subsidiaries, associates and joint ventures.
The recognition and measurement of exploration and evaluation assets is set out in IFRS 6, Exploration for and Evaluation of Mineral Resources. Mineral rights and exploration and evaluation assets are specifically excluded from the scope of PPE. However, productive assets held by entities in the extractive industries are subject to the same recognition and measurement rules as other PPE.
Recognition
An item of PPE should be recognised as an asset, if it is probable that future economic benefits associated with the asset will flow to the entity and the cost of the item can be measured reliably. Future economic benefits occur when the risks and rewards of the asset 's ownership have passed to the entity. PPE is initially recognised at its cost, which is the fair value of the consideration given.
All the directly attributable costs necessary to bring the asset into working condition should be capitalised: these costs include delivery and installation costs, architects ' fees and import duties. Where relevant, these costs should include borrowing costs and directly attributable overhead costs. Any income earned during the pre-production phase, which is not
By Graham Holt
Studying this technical article and answering the related questions can count towards your verifiable CPD if you are following the unit route to CPD and the content is relevant to your learning and development needs. One hour of learning equates to one hour of CPD. We 'd suggest that you use this as a guide when allocating yourself CPD units.
Property plant and equipment (PPE) are tangible assets that an entity holds for its own use or for rental to others, and that the entity expects to use during more than one period. PPE could be constructed by the reporting entity or purchased from other entities.
Biological assets, intangible assets and investment property are not PPE. Neither are investments in subsidiaries, associates and joint ventures.
The recognition and measurement of exploration and evaluation assets is set out in IFRS 6, Exploration for and Evaluation of Mineral Resources. Mineral rights and exploration and evaluation assets are specifically excluded from the scope of PPE. However, productive assets held by entities in the extractive industries are subject to the same recognition and measurement rules as other PPE.
Recognition
An item of PPE should be recognised as an asset, if it is probable that future economic benefits associated with the asset will flow to the entity and the cost of the item can be measured reliably. Future economic benefits occur when the risks and rewards of the asset 's ownership have passed to the entity. PPE is initially recognised at its cost, which is the fair value of the consideration given.
All the directly attributable costs necessary to bring the asset into working condition should be capitalised: these costs include delivery and installation costs, architects ' fees and import duties. Where relevant, these costs should include borrowing costs and directly attributable overhead costs. Any income earned during the pre-production phase, which is not