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IAS 16
Property, Plant and Equipment - Coggle Diagram
IAS 16
Property, Plant and Equipment
Introduction
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• Record property, plant, and equipment at cost.
Scope
• Applies to property, plant, and equipment used in agricultural activities.
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• Applies to property, plant, and equipment used to develop or maintain these assets.
• Entities using a cost model for investment property must use this standard for owner-occupied investment property.
• Applies to perennial crops for products, not to production of perennial crops for products.
Record
[IAS 16.7]
- More likely to bring future economic benefits to the unit; and
- The cost of the asset can be determined reliably
• Applies to initial acquisition or construction costs.
• Includes subsequent costs for addition, replacement, or service.
The cost of property, plant and equipment should be recognized as an asset if and only if
[IAS 16.9]
IAS 16 does not prescribe a unit of value for recognition, specifically, what constitutes an item of property, plant and equipment.
[IAS 16.13]
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• Procurement of parts for less frequent routine replacements like building walls or non-essential parts.
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[IAS 16.43]
Each part of an item of property, plant and equipment whose cost represents a significant proportion of the total cost of that asset must be depreciated separately
[16.13]
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• Procurement of parts for less frequent routine replacements like building walls or non-essential parts.
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[16.14]
• Regular major repairs are necessary for continued operation of property, plant, and equipment.
• Costs of these repairs are recognized in the carrying amount of property, plant, and equipment.
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• Estimated cost of a similar future major repair can reflect the current cost of the major repair when the asset was acquired or constructed.
Initial measuremen
[IAS 16.15]
For property, plant and equipment to qualify for recognition as an asset, it must be valued at its original cost.
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