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Fundamentals of IAS 16 - Property Plant & Equipments

All you need to know about IAS 16 for accounting treatment of fixed assets


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Description

IAS 16 establishes principles for recognizing property, plant, and equipment as assets, measuring their carrying amounts, and measuring the depreciation charges and impairment losses to be recognized in relation to them. 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.

Property, plant, and equipment include bearer plants related to agricultural activity.


IAS 16 applies to the accounting for property, plant and equipment, except where another standard requires or permits differing accounting treatments, for example:

- assets classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations biological assets related to agricultural activity accounted for under IAS 41 Agriculture

- exploration and evaluation assets recognised in accordance with IFRS 6 Exploration for and Evaluation of Mineral Resources mineral rights and mineral reserves such as oil, natural gas and similar non-regenerative resources.


The cost of an item of property, plant, and equipment is recognized as an asset if, and only if:

· it is probable that future economic benefits associated with the item will flow to the entity; and

· the cost of the item can be measured reliably.


In this course, we will be learning practical aspects of implementing the standards

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