IAS 16 PROPERTY, PLANT AND EQUIPMENT
LEARNING OBJECTIVES
1.Definition
2.Recognition
3.Initial Measurement
4.Subsequent Expenditure
5.Subsequent Measurement
6.Depreciation
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Definition:
Property, plant and equipment are tangible assets held by an entity for more than one accounting period for use in the production or supply of goods or services, for rental to others, or for administrative purchases.
Recognition:
- Cost of asset can be reliably measured
- Probable that future economic benefits associated with the assets will flow to the entity
Initial measurement:
üPurchase price-Price, Import duties, Non-refundable purchase taxes LESS Trade discounts/rebates
üDirectly attributable costs: Site preparation, Delivery/handling, Testing and Professional fees
üOther costs: Estimate of dismantling/removal costs and site restoration (IAS 37) and Finance costs (IAS 23)
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