= Property, Plant and Equipment biective + Statement covers the recognition criteria for PPE, how to dotermine carrying amount and caculaon of dopeociation ‘and impairment losses ‘Scone ‘Covers a PPE but NOT: 1 PPE slid ahd for el > lr lace on teria + bloga! asses» covered ude art statement rt par of ths couse) + mara igi and coves cay aval (2) : «Can tnt csi ve x arcing ‘oeade heise value en he 6S + Cost cash set pid OR av given 1 Deel sau coalF ne rail ve + Ey apt wtp Vl rp ae ih ows + Fai vo (FV) ~onount oxhargoaio Belwconhrowoigeabie wing paras a ema lrg aneacoon + Ingairmartiees cag arnt > cover amount + EP tanghl ove aed n raster tapos, ta ‘Beconntin Criteria ‘Vary simpo => the FRAMEWORK gies us the guidance, but fst what isan asset again? Its a resource controled by tho entity, arising from past events, whic likely fo give rise to future economic Donors Furthermore the recognition tera are: + probable tue ezororic bnetis 1 ost st bo messiae, Exclude? Tepe + Costs of opening new facity + Oe recystrouisbie + Coss tong new prosuctserves : + Ain and general O's + ingot des + = ++ Costs incurred while an iter + Nonsolundabi taxes 's capable of operating in ‘manner intended + Discourtsrebates + Inital operating losses seegared angie tomdmesnnted tna wieay wie ae sbeebs anny wee SU eh oma 2 center tn pc ancora 7 Ricans ee + Excudee Teamscticuoskgas ter . a Rotor example Sperations > SSR RSE ea R a oe eS ‘Measurement alter Inial Recognition ‘Daxteciaion + We noed 1 ook a isis as revaluation model impacts how wo +The statement aiows a company to other: + wea cos! modal cet leseacaztules dep + soeurutes ‘parm 1 company uses cost mode for vesimen! Property then MUST {se eel mod under PPE (i henge abou) subsequently wea deprecation + NOTE that depreciation BEGINS wt sails ustating dar noting «Aa geal aszals can and musta deprecised EXCEPT for ‘and (obwousy) «+ Thowe a 3 rains mettod use: + ste { fedrg tance 1 Smal heat rettos Jaton lt very dfcutin and of ise but yeu will S26 * iafcompleapons ance nen werevaue. 7 Foler oxample 5 asset ie avalabie fe you MUST deprecateBavaluations, + Mis this section that causes most ofthe problems in practice + There are 2 ways of ding this per the statement + tae overig roprinany ie GROSS REPLACEMENT ODEL Hoo we oko tho ol cot and accunetad ‘oprosetor end we gon am vp on + eimoat th acim cprecaton agains the cost MET ‘REPLACEMENT MODEL Peter axaroe «The movernantein the evaluat amount eated 28 flows: * tying an artnet) = pews sou + soydeessas tenth ns stort ny soit prenoos wre aon [itercxamgte + Siatementalows a company to reaise te sup viaelained farringe => thsisa poy choice + Amount vanslored rust bone of tx + NOTE thatthe amount vansteredis ifrence between the depr Drevalued aun and depron angina cot 0 an lor of PPE when is dsposnd of when no ure -Seeoeaem 'afg expected => al ths time you recognise ‘Semloes on dercagniban ‘Ts VERY much of TRS VEny portant and wo wg trough much as we co oyorsses bayou mutt gan eadihe Sssoaure ‘oauiomente ote salon! Doteres tax + Tha taxmpscasons of PPE causes much some problems for ‘tenis vey exemple we do wi have aan eet 30 wi oben rough Gelered tax work ass ever ‘ins of itorest “PPE is VERY LIKELY to come up. + Use the following layaut IT WORKS! Peso Va esrimet‘Points. of intrest (coat) + Change in deprecation method = change in estimate NOT a ‘change in policy + Be careful to check when an asset revaluation takes place ie beginning of year or end of year => this can effect doprecation charoe + Be on the lookout for deferred tax implications of PPE be it rovaluations, deprecation chargos v woar and fear, ots => ‘Some assets have no Wear andear ang hence no reversal in future which mears no defered tax (eg. admin bulings) + Know what rates to apply fr deferred tax ie lands always acGT rate een