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IAS 16 Property, Plant and Equipment

IAS 16 Property, Plant and Equipment sets out the requirements for the recognition of the assets, the determination of their carrying amounts, and the depreciation charges and impairment losses in relation to them.

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Summary

Property, plant and equipment (PPE) should be recognised initially at cost.

  • Cost comprises all directly attributable costs in bringing the asset to the location and condition necessary for normal use.
  • Subsequently, either the cost or revaluation model may be applied. An entity must apply the same measurement model consistently to each class of PPE.
  • Revaluation surpluses are recognised as other comprehensive income and accumulated in equity.
  • Items of PPE must be depreciated on a systematic basis over their useful life.
  • On disposal, the difference between the carrying amount of the asset and proceeds received is recognised in profit or loss.

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UK reduced disclosures – FRS 101

UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Our FRS 101 page gives more information on which entities qualify and the criteria to be met.

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The Corporate Reporting Faculty's annual IFRS factsheets provide a more detailed discussion of recent IFRS amendments.

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