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CHAPTER 8 PAS 16 - PROPERTY, PLANT AND EQUIPMENT, MENGER SIMON PINO -…
CHAPTER 8 PAS 16 - PROPERTY, PLANT AND EQUIPMENT
DEFINITION
:check:Tangible assets held for use in the production or supply of goods or services, for rental to others, or for administrative purposes.
:check:Expected to be used during more than one period.
RECOGNITION
:green_cross:Probable future economic benefits: The asset is expected to generate future economic benefits.
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INITIAL MEASURMENT
:red_cross:Cost Model:
-Purchase price, including import duties and non-refundable taxes.
-Costs directly attributable to bringing the asset to its working condition for its intended use
:red_cross:Revaluation Model:
PPE can be revalued to its fair value, provided it is reliably measurable. Subsequent revaluations are recognized in other comprehensive income (OCI).
SUBSEQUENT MEASUREMENT
:red_cross:Cost Model:
PPE is carried at its cost less accumulated depreciation and impairment losses.
:red_cross:Revaluation Model:
PPE is carried at its fair value less subsequent accumulated depreciation and impairment losses.
DEPRECIATION
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:no_entry:Systematic allocation: The depreciable amount of an asset is allocated over its useful life.
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DERECOGNITION
:warning:The difference between the net disposal proceeds and the carrying amount is recognized in profit or loss.
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PAS 23 - BORROWING COST
:recycle:Qualifying Assets:
An asset that necessarily takes a substantial period of time to get ready for its intended use or sale.
:recycle:Capitalizable Borrowing Costs:
-Interest expense on specific borrowings incurred to finance the acquisition, construction, or production of a qualifying asset.
-Other finance costs directly attributable to the acquisition, construction, or production of a qualifying asset.
:recycle:Capitalization Period:
-Starts when expenditures for the asset are incurred and borrowing costs are being incurred.
-Ends when the asset is substantially complete and ready for its intended use or sale.
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