snarnoi8 |AS 16 Property, Plant and Equipment - FRSbox - Making IFRS Easy After 2 months, | landed a new position of IFRS conversion manager with 70% pay rise. Click here to learn more By usiny Lur website, you ayree iv tie Learn mure V’wukies/i use of our cookies. Got it! V2 (https://wwwifrsbox.com/) GDi« IAS 16 Property, Plant and Equipment (https:// wwwifrsbox.com /ias-16-property-plant-and- equipment/) by Silvia (https:// www. ifrsbox.com/author/silvia/) IFRS SUMMARIES (HTTPS.// WWAWIFRSBOX.COM/CATEGORY/IFRS- SUMMARIES/, IFRS VIDEOS HTTPS /WANWIFRSBOXCOM/CATEGORY/IFRS-VIDEOS/), PPE IAS 16 /AND RELATED) HTTPS// WWWIFRSBOXCOM/CATEGORY/PPE-IAS-16- AND-RELATED/) © 418 (https://wwwifrsbox.com/ias-16-property-plant-and- equipment/#comments) hitpshwwwrsbox.convias-16-property-plant-and-equipment) wensnarnoi8 IAS 16 Property, Plant and Equipment -IFRSbox - Making IFRS Easy Standard IAS 16 prescribes the accounting treatment for property, plant and equipment and therefore it is one of the most important and commonly applied standards, The main issues dealt in IAS 16 are recognition of property. plant and equipment, measurement at and after recognition, impairment of property, plant and equipment (although IAS 36 deals with impairment (/ias-36-impairment-assets/) in more detail) and derecognition. Recognition of Property, Plant and Equipment Property, plant and equipment are tangible items that are 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. IAS 16 states that the cost of an item of property, plant and equipment shall be recognized as an asset if, and only if: * itis probable that future economic benefits associated with the item will flow to the entity; and * the cost of the item can be measured reliably. This recognition principle shall be applied to all costs at the time they are incurred, both incurred initially to acquire or construct an item of property, plant and equipment and, incurred subsequently after recognition to add to, replace part of or service it. Special For You! Have you already checked out the IFRS Kit ? It's a full IFRS learning package with more than 40 hours of private video tutorials, more than 140 IFRS case studies solved in Excel, more than 180 pages of handouts and many bonuses included. If you take action today and itpssiwwrsbox convis-16-property-plantand-equipmont) arnsnarnoi8 |AS 16 Property, Plant and Equipment - FRSbox - Making IFRS Easy subscribe to the IFRS Kit, you'll get it at discount! Click here to check it out! (/courses/ifrs-kit) Initial costs Some items of property, plant and equipment might be necessary to acquire for safety or environmental reasons. Although they do not directly increase the future economic benefits, they might be inevitable to obtain future economic benefits from other assets and therefore, should be recognized as an asset For example, water cleaning station might be necessary in order to proceed with some chemical processes within chemical manufacturer. Subsequent costs Day-to-day servicing of the item shall be recognized in profit or loss as incurred, because they just maintain (not enhance) item's capacity to bring future economic benefits, However, some parts of the item of property, plant and equipment may require replacement at regular intervals, for example, aircraft interiors. In such a case, an entity derecognizes carrying amount of older part and recognizes the cost of new part into the carrying amount of the item. The same applies to major inspections for faults, overhauling and similar ites. Measurement Initial Measurement itpssiwwrsbox convis-16-property-plantand-equipmont) sen