I. IAS 16 PROPERTY, PLANT AND EQUIPMENT
IAS 16 property, plant and equipment provide the rules relating to accounting for non-current assets, including depreciation.
Definition depreciation is measure of the cost of the economic benefits of the tangible non-current asset that have been consumed during the period.
This consumption may arise because of any of the following factors.
- Use-i.e. Plant and machinery or motor vehicles are eventually used so much that they are worn out.
- Passing of time –e.g. a ten-year lease of property expires when the ten years have passed.
- Obsolescence through technology and market changes-e.g. plant machinery of a specialised nature can quickly become obsolete and will need to be replaced by more modern equivalents.
- Depletion –e.g. the extraction of material form a quarry.
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Chapter 3 Non Current Asset (answer in chapter 3)