Please enable JavaScript.
Coggle requires JavaScript to display documents.
Tangible Non-Current Assets - Coggle Diagram
Tangible Non-Current Assets
Property, Plant and Equipment (IAS16)
A tangible assets that had the abilities to generate income or provide services which expected to be used for longer period.
Example: CNC machine, Land, Building, major componets or spare part of PPE
Overhaul
Cost will be capitalized and depreciated
Total cost of PPE
= Purchase price - Discount/rebate + taxes + directly attributable cost + cost of dismantling
Depreciation
Fomula
i)Straight line method
ii) Reducing balance method
Investment Property (IAS 40)
Fair Value Method
Company may buy the property for investment purposes rather than business use
Example: To earn rentals or for Capital appreciation or Both
Changing Model
Can only change the model if it provides the true and fair view
Cost Method
Borrowing Cost (IAS23)
Suspension of Capitalization
If active development is temporarily stopped, capitalization of borrowing cost should be suspended
IAS 23 Revised: Borrowing cost directly attributable to the construction can be capitalized as part of the cost of the asset
Example: Interest of loan, Bank charges and other costs
Borrowing Cost - Investment Income
Commencement of Capitalization
Expenditure on the asset is being incurred;
Borrowing costs are being incurred; and
Activities are in progress that is necessary to prepare the asset for its intended use or sale.