IAS 16 - Property, Plant and Equipment Flashcards
define property, plant and equipment
held for the production or supply of goods or services, for rental to others or for admin purposes and are expected to be used during more than one period
what are the terms for recognition as a property, plant, equip
will have future economic benefits
cost can be measured reliably
is routine repair and servicing capital expenditure
no
what does initial measurement of PPE include
-purchase price
-import duties and non refundable taxes
-minus trade discounts
-transport and instillation costs
-dismantling and removing costs estimates
why are employee training costs not included in initial measurement
you do not have control over employees
what to debit and credit when it comes to dismantling costs
DR Asset price
CR Provision to dismantle
do you depreciate land
no
what is the depreciable amount
asset cost less its residual value
what is the purpose of depreciation
allocate the expense between the accounting periods
methods of depreciation
straight line
reducing balance
units of production
how often should a review of the assets residual value and useful life take place
at least at then end of each financial year
how often should the depreciation method used be reviewed
also at least at the year end of financial year
what value are assets carried at in cost model
cost - accumulated depreciation
what value are assets carried out in revaluation model
fair value - subsequent accumulated depreciation
what does it mean that you cannot cherrypick assets to apply the revaulation model to
if revaluation model is used it must be applied to the entire class of assets
