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LKAS 16 - PPE - Coggle Diagram

- - - - cost - accumulated depreciation - accumulated impairment losses
- - - - Included
        
         cost of salaries, wages of employees arising directly from the construction or acquisition of the item of property, plant and equipment;
        
         cost of site preparation;
        
         initial delivery and handling costs;
        
         installation and assembly costs;
        
         Costs of testing whether the asset is functioning properly, after deducting the net
        
        proceeds from selling any item produced while bringing the asset to that location and
        
        condition (such as samples produced when testing equipment); and
        
         Professional fees
      - Not included
        
        a) Costs of opening a new facility;
        
        b) Cost of introducing a new product or service (including costs of advertising and promotional activities);
        
        c) Costs of conducting business in a new location or with a new class of customer (including costs of staff training); and
        
        d) Administration and other general overhead costs.
  - - - Revaluation gain
        
        Is there any previously identified loss
        
        YES
        
        Take the revaluation gain to P&L until you set off previously loss identified in the P&L- other expenses within brackets
        
        NO
        
        Take the rev. gain to rev. reserve account
      - Revaluation loss
        
        Is there any previously identified loss
        
        YES
        
        loss should be set off against reserve (RR- Within brackets)
        
        NO
        
        charge the loss to P&L as other expense
- - - - Remove the accumulated depreciation up to disposed date
        Accumulated Depreciation Account DR
        Disposal Account CR
        
        Sales proceeds for Disposed Asset
        Cash DR
        Disposal CR
        
        recognition of disposal gain or loss
        (A) If it is a Gain
        Disposal Account DEBIT
        Profit or Loss Statement CREDIT
        (B) If it is a Loss
        Profit or Loss Statement DEBIT
        Disposal CREDIT
  - - - Remove the accumulated depreciation up to exchanged date
        Accumulated Depreciation Account DR
        Exchange account. CR
        
        Exchange value for Exchanged asset
        Asset Account DR
        Exchange Account CR
        
        Cash paid to acquire new asset
        Asset Account DR
        Cash Account cr
        
        recognition of exchange gain or lossIF ITS A GAIN,
        exchange account DR
        P&L CR
        
        IF ITS A LOSS,
        P&L DR
        exchange CR
- - - - Straight Line Basis
        
        Depreciation = (Cost - Residual Value)/ Usefulll life time Depreciation = (Cost - Residual Value) * Depreciation Rate
      - Reducing balance Method
        
        Depreciation = (Cost - Accumulated Depreciation) * Use full life time
- - - - recognize the gain or loss from the revaluation