Property, Plant and Equipment Property, Plant and Equipment

Initial Recognition and Measurement Subsequent Measurement

Topic Outline Topic Outline

1. What is property, plant and equipment? 1. For subsequent measurement of ppe, what are the two
a. Examples models to choose from?
b. Exceptions
2. When do we recognize property, plant and equipment? 2. What is the general rule if we use the cost model?
3. What is the composition of cost to be capitalized as PPE?
a. Purchase price 3. In using the cost model, what do we consider when:
b. Direct costs a. We depreciate?
Land/Building i. Definitions
Equipment Depreciation
Self-Constructed Asset Residual value
Costs to be capitalized Depreciable amount
Exceptions Useful life
c. Initial estimate for dismantling and restoration ii. Kinds of depreciation
4. When do we stop capitalizing? iii. Rules for depreciation
5. What are expensed? General rules
6. How do we compute for cost, specifically the purchase When does it start?
price? When does it stop?
a. Acquisition on cash basis When does it not stop?
b. Acquisition on account iv. Depreciation methods
c. Deferred settlement What does PAS 16 say?
d. Acquisition through exchange Methods based on time
With commercial substance Straight line
With no commercial substance Accelerated
e. Acquisition through trade-in SYD
f. Acquisition through issuance of equity DD
instruments Partial depreciation
g. Acquisition through issuance of bonds payable Methods based on actual use
h. Acquisition by donation Units of production
7. Special topics Group depreciation
a. Lump-sum purchase of PPE items Composite method
Regular lump-sum Group method
With demolition of building Retirement method
If building is unusable Replacement method
b. Demolition costs Inventory method
To construct a new building v. Depreciation for special items of ppe
To clear land for possible sale Leasehold improvements
c. Land improvements Fully-depreciated assets
d. Building improvements vi. Changes in method, useful life and
e. Bearer plants residual value
f. Leasehold improvements
b. There are costs subsequent to initial
recognition?
i. When are these capitalized?
Improvements/replacements
Replacements of major parts
Rearrangement/Reinstallation
Repairs

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Property, Plant and Equipment Investment Property
Subsequent Measurement Topic Outline
Topic Outline (continuation)
1. Definition of investment property
4. In using the revaluation model, 2. Inclusions and exclusions
a. What is the basis? a. Examples
b. How many times should we revalue? b. Not IP
c. What is the scope of revaluation? c. Part IP and part PPE
d. Revaluation surplus (rs): d. Ancillary services
i. General rules for rs? e. In consolidated financial statements
If increase
If decrease 3. Initial measurement
ii. How do we record rs? 4. Subsequent measurement
iii. Subsequent recording a. Cost model
iv. Reversal b. Fair value model

5. Derecognition of PPE 5. When can we use both cost and fair value model?
a. When do we derecognize ppe? 6. Requirement for determining fair value regardless of
b. How do we compute for g/l on derecognition? model used
c. How do we record consideration received if ppe 7. Change of accounting policy from cost to fair value model
sold? (vice versa)
8. Transfer to or from investment property
6. Compensation for impairment -General rule
Evidence of change of use
-When using cost model
-When using fair value model
9. Rules for Self-Constructed IP
10. Subsequent expenditures
-General rule
-Replacement parts
- if using cost model
-if using fair value model
11. Impairment
12. Derecognition

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Borrowing Costs Depletion of Mineral Resources
Topic Outline Topic Outline

1. What borrowing costs are capitalized? 1. What is the scope of PFRS 6?

2. Examples of borrowing costs a. Expenditures covered
3. What is a qualifying asset? b. Expenditures not covered
-Examples of qualifying assets c. Natural resources
-Examples of items not recognized as qualifying
assets 2. What expenditures can be capitalized under PFRS 6?
4. When does capitalization of borrowing costs start? What cannot?
5. When can we suspend capitalization?
6. When do we stop capitalization? 3. What is the initial measurement of assets covered under
7. What borrowing costs are eligible for capitalization? PFRS 6?
- Specific borrowing
- General borrowing 4. What are the types of cost specifically for natural
- Specific and general borrowings resources to be used in initial measurement?
- Specific borrowing used for general purposes a. Purchase price
- Direct costs
8. Limitations on expenditures used in computation of - Dismantling, removing, restoration &
capitalizable borrowing cost decommissioning costs
9. Capitalization during extended period of construction With obligation
10. Financial statement preparation -Examples
-Cost computation
Without obligation (not part)
-Examples

b. Exploration costs
c. Development costs
- intangible
- tangible (not part of natural resource)

5. Subsequent measurement
6. Depletion of natural resources
- Definition
- Start of depletion
- Cessation
- Other rules

7. Accounting for extracted materials

8. Depreciation of mining equipment
9. Liquidating dividends
10. Changes in accounting policy
11. Reclassification
12. Impairment loss
13. Accounting for decommissioning costs
14. Changes in estimates

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