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PPE Part 2 - Coggle Diagram
PPE Part 2
Inspection cost
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Derecognise any remaining carrying amount of the previous inspection, regardless of whether it was identified in the transaction in which the item was acquired or constructed
Recognize cost of the inspection as part of the PPE item when inspection is performed (separate component)
If necessary, the estimated cost of a future similar inspection may be used as an indication of what the cost of the existing inspection component was when the item was acquired or constructed
A condition to continue the use of an item of PPE may be that major inspections must be performed, regardless of whether components of the item are replaced:
Revaluations
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Revaluation must be performed on a regular basis to ensure that the carrying amount does not differ materially from the fair value at reporting date
An entity can choose the cost model, or revaluation model, for subsequent measurement of PPE
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Exchange of PPE items
One or more items of PPE may be acquired in exchange for a non-monetary asset or assets, or a combination of monetary and non-monetary assets. The cost of such an item is measured at fair value
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