Property, plant and equipment are tangible items – meaning with physical substance

Measurement at recognition
Site preparation – wrecking or demolition of buildings, excavation
Initial delivery – transfer of the asset to the new owner
Installation - installing

Cost is the amount of cash paid in the fair value given to acquire an asset
Recognized at the net book value (cost-acc dep)
Revalued carrying amount – fair value at the date of revaluation less any subsequent
accumulated depreciation

Carrying value – usually based on the company’s balance sheet while the
fair value is based on the current market price

Cash basis includes the cash paid plus attributable cost like freight, installation cost
Installment – the excess on installment price over the cash price is treated as an interest to be
amortized over the credit period

Exchange is recognized at carrying amount if the exchange transaction lacks commercial

substance.

Derecognition – carrying amount of an item of ppe shall be derecognized on disposal or when

no future economic benefits are expected from the use

Depreciation is not so much a matter of valuation but a matter cost allocation

Depreciation is an expense.
Depreciation of an asset begins when it is available for use
Depreciation does cease when the asset is derecognized

Factors of depreciation
Depreciable amount
Parts of an item of ppe with significant relation to the total cost shall be depreciated separately.
Ex. Engines, airframe, and tires of an aircraft.

Residual value
Useful life
Expected usage of the asset – usage is assessed by reference to the expected capacity
Expected physical wear and tear – operational factors such as the number of shifts the
asset is used, repair and maintenance program
Technical or commercial obsolescence – this arises from changes or improvements in
production, or change in the market demand
Legal limits – for the use of the asset, such as the expiry date of the related lease