PPE Flashcards
1
Q
Scope of IAS 16
A
all PPE except where another standard requires or permits differing accounting treatments
2
Q
Characteristics of PPE
TURAM
A
- Tangible asset
- held for USE in the production or supply of goods or services
- for RENTAL* to others, or
- for ADMINISTRATIVE purposes; and
- are expected to be used during MORE than one period.
- operating lease of assets other than land and/or building; otherwise, Inv. property na
- finance lease - di mo na asset kay lessee na
3
Q
Relate IAS 16 to
- IAS 41
- IAS 40
A
- bearer plant related to agri act is PPE
2. investment property accounted for using the cost model under IAS 40 qualifies under cost model of IAS 16
4
Q
Initial measurement of PPE
A
COST
- Purchase price
- DACS
- est. costs of dismantling, removal and restoration, UNLESS those costs relate to inventories produced during that period.
5
Q
Examples of Exceptions to IAS 16
A
- assets held for sale in accordance with IFRS 5
- biological assets related to agricultural activity - IAS 41
- exploration and evaluation assets with IFRS 6
- mineral rights and mineral reserves such as oil, natural gas and similar non-regenerative resources (IFRS 6/ IAS 38)
PPE used to develop or maintain the last 3 categories of assets qualifies in IAS 16
6
Q
Recognition Rule for PPE
(2)
- Item by item
- at the time they are incurred
A
- probable flow of future economic benefits; and
2. cost can be measured reliably.
7
Q
Special Considerations in Recognition
of PPE
A
- Spare parts and standby Equipment
GR: Inv (pag nasa factory), Prepaid supplies (pag wala sa factory)
Ex: MAJOR spareparts and LONG LIVED standby Equip - Environmental & Safety Equip is PPE
needed to secure business permit to operate
