The same rule for revaluation of property applies to plant and equipment. It is a reliable, easy to follow method, and is used worldwide. Ias 16 property, plant and equipment ifrs standards tracker. It replaced ias 16 accounting for property, plant and equipment. In 1998, ias 16 revised by ias 36, impairment of assets. Ias 16 states that the cost of an item of property, plant and equipment shall be recognized as an asset if, and only if. Introduction this chapter is really a continuation of the last chapter in that both chapters relate to property, plant and equipment and both are therefore governed by ias 16. Adeel august 18, 2016 august 23, 2016 2 comments on summary notes. Exposure draft ed20174 property, plant and equipmentproceeds before intended use proposed amendments to ias 16 is published by the international accounting standards board board for comment only. The standard requires an entity to measure an item of property, plant and equipment acquired in exchange for a nonmonetary asset or assets, or a combination of monetary and nonmonetary assets, at fair value unless.
Standard ias 16 prescribes the accounting treatment for property, plant and equipment and therefore it is one of the most important and commonly applied standards the main issues dealt in ias 16 are recognition of property, plant and equipment, measurement at and after recognition, impairment of property, plant and equipment although ias 36 deals with impairment in more detail and. The objective of ias 16 is to prescribe the accounting treatment for property, plant, and equipment. Some of the positive aspects related to ias 16 are. International accounting standard 16 property, plant and. This standard is applicable in accounting for property, plant and equipment, which it defines as tangible items that. You have to finish following quiz, to start this quiz. The item which meets the following criteria will be. The bearer plant definition the amendment of ias 16 has changed the definition of biological assets to the class of property, plant, equipment that is use in an entitys operation.
What are the international positive and negative critique for ias 16, property, plant and equipment. Ias 16 should be read in the context of its objective and the basis for conclusions, the preface to. It makes it easy for accountants to carry out the accounting process for the plant, equipment and property. Paragraphs that have been added to this standard and do not appear in the text of ias 16 are identified with the. Property, plant and equipment ias 16 understanding.
Property, plant and equipment ias 16 and borrowing. Sep 16, 2009 ec staff consolidated version as of 16 september 2009 last eu endorsedamended on 12. Pptx new latest free download as powerpoint presentation. This chapter, however, deals with the two measurement models that ias 16 allows you to apply. The objective of this standard is to prescribe the accounting treatment for property, plant, and equipment so that users of financial statements can discern information about an entitys investment in its property, plant, and equipment and the changes in such investment. Property, plant and equipment proceeds before intended use. Aasb 116 and ias 16 aasb 116 property, plant and equipment as amended incorporates ias 16 property, plant and equipment as issued and amended by the international accounting standards board iasb. Ifric 15 service concession arrangements ifric 18 transfers of assets to customers sic29 disclosure service concession arrangements sic32 intangible assets web site costs effective date periods beginning on or after 1 january 2005 specific quantitative disclosure requirements. However, there are difficulties of obtaining a market value for plant and equipment that are recognised in ias 16. Depreciation should reflect the expected pattern of consumption of the future economic benefits of the asset. Identify the appropriate accounting treatment to subsequent measurement of ppe. Technical summary this extract has been prepared by iasc foundation staff and has not been approved by the iasb. Property, plant and equipment comprises tangible assets held by an entity for use in the production or supply of goods or services, for rental to others or for administrative purposes, that are expected to be used for more than one period.
Ias 16 property, plant and equipment draft interpretation accounting for proceeds and cost of testing ppe. Ias 16 property, plant and equipment this version includes amendments resulting from new and amended ifrss issued up to 31 march 2004. Ias 16 property, plant and equipment sets out the requirements for the recognition of the assets, the determination of their carrying amounts, and the depreciation charges and impairment losses in relation to them. Ias 16 property, plant and equipment ifrsbox making. Bc1 paragraph 16 b of ias 16 property, plant and equipment explains that the cost of an item of property, plant and equipment includes costs directly attributable to bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. What are the positive and negative international critique. Ias 16 property, plant and equipment ifrsbox making ifrs easy. This course is part of the ifrs certificate program a comprehensive, integrated curriculum that will give you the foundational training, knowledge, and practical guidance in international accounting standards necessary in todays global business environment this selfstudy course addresses requirements of ias 16, property, plant and equipment, and ias 23, borrowing costs, including the. Determine the initial measurement of property, plant, or equipment ppe. Ias 16 describes the accounting treatment for property, plant and equipment unless another standard requires or permits a different accounting treatment. What are the positive and negative international critique for. Sic6 was superseded by and incorporated into ias 16 2003. Ias 16 property, plant and equipment other bibliographies. Framework to refine the concepts so as to apply to property, plant and equipment.
Ias 16 \u2014 property, plant and equipment ias 16. Ias 16 property, plant and equipment sets out the requirements for the recognition of the assets, the determination of their carrying amounts. Recognize accounting requirements for borrowing costs. Ias 16 property, plant and equipment ifrs standards.
Ias 16 is applied in accounting for property, plant and equipment. Property, plant and equipment ind as 16 property, plant. Ias 16 property, plant and equipment a closer look. The objective of ias 16 is to provide information about property, plant and equipment so that the users of the financial statements can identify information about the entitys own investment in its property, plant and equipment and the changes in such investment. Property plant and equipment ias 16 linkedin slideshare. Bearer plants will fall under the scope of ias 16 while the produce grown on the plants will remain under ias 41. Ec staff consolidated version as of 16 september 2009 last eu endorsedamended on 12. Inventories and ias 16 property, plant and equipment. Sep 09, 2015 the committee discussed various topics related to ias 16. Find out more about the benefits of membership and joining details. Ias 16 property, plant and equipment essay 1269 words. International accounting standard 16 property, plant and equipment objective 1 the objective of this standard is to prescribe the accounting treatment for property, plant and equipment so that users of the financial statements can discern information about an entitys investment in its property, plant and equipment and the changes in such. Ias 16 applies to property, plant and equipment ppe.
International accounting standard 16 property, plant and equipment ias 16 is set out in paragraphs 183 and the appendix. These are the sources and citations used to research ias 16 property, plant and equipment. Ias 16 property, plant and equipment adeel august 18, 2016 august 23, 2016 2 comments on summary notes. He said that in previous meeting the committee tentatively decided to develop an interpretation on the meaning of testing, focusing on the meaning of functioning properly in paragraph 17e of ias 16. Property, plant and equipment ind as 16 property, plant and. Systems, jahangirnagar university, savar, slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Property, plant, and equipment ipsas 17 objective 1. International accounting standard 16 property, plant and equipment or ias 16 is an international financial reporting standard adopted by the international accounting standards board iasb. It does not prescribe the unit of measure for recognition of what constitutes plant, property and equipment. Esma has considered the ifrs ics tentative decision not to continue with the development of an.
Ias 16 was reissued in december 2003 and is applicable for annual. The principal issues in accounting for property, plant and equipment are the recognition of the assets, the determination of their carrying amounts and the. Ias 16 property, plant and equipment summary youtube. Ias 16 ias 16 property plant and equipment this version. An overview of the requirements of ias16 including reference to ind as on property plant and equipment.
The cost of an item of property, plant and equipment is recognised as an asset if, and only if. They are not made available for sale in the ordinary course of business. Sic14 property, plant and equipment compensation for the impairment or loss of items. Ias 16 property, plant and equipment kpmg in india. Iasb publishes amendments to ias 16 property, plant and equipment and ias 38 intangible assets project update released on 12 may 2014 announcing a clarification of acceptable methods of depreciation and amortisation.
Depreciation of an asset begins when it is available for use, that is, when it is in the location and condition. Property, plant and equipment are tangible items that. It was issued by iasb in december 1993 and concerns the accounting related to property, plant and equipment. Amendments to ias 16 property, plant and equipment the board decided to amend ias 16 to explicitly prohibit revenuebased depreciation for property, plant and equipment. This is a short executive summary of ias 16 property, plant and equipment. Ias 16 outlines the accounting treatment for most types of property, plant and equipment.
All the paragraphs have equal authority but retain the iasc format of the standard when it wa s adopted by the iasb. International accounting standard 16 property, plant and equipment ias 16 replaces ias 16 property, plant and equipment revised in 1998, and should be applied for annual periods beginning on or after 1 january 2005. Apr 03, 2012 this is a short executive summary of ias 16 property, plant and equipment. Ias 16 establishes principles for recognising property, plant and equipment as assets, measuring their carrying amounts, and measuring the depreciation charges and impairment losses to be recognised in relation to them. Ias 16 property, plant and equipment ias 16 property. It concerns accounting for property, plant and equipment known more generally as fixed assets, including recognition, determination of their carrying amounts, and the depreciation charges and impairment.
The standard itself defines ppe as tangible items that are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes. Home ifrs quizzes ias 16 property, plant and equipment quiz. Pdf the objective of this paper is to describe the accounting treatment for property, plant and equipment, in according with the ias 16, including find, read. Initial estimate of the cost of dismantling and removing the item and restoring the site in which it is located. Pdf concise aspects regarding the accounting treatment for. Ifrs in focus iasb amends ias 16 and ias 38 to clarify.
Download pdf, 651kb ias 16 property, plant and equipment ifrs, ifrs summary notes, summary notes. Property, plant and equipment is initially measured at its cost, subsequently measured either using a cost or revaluation model, and depreciated so that its depreciable amount is allocated on a systematic basis over its useful life. Depreciation of an asset begins when it is available. The iasc issued revised ias 16, accounting for property, plant and equipment, in december 1993, as part of the comparability of financial statements. Some of the negative aspects related to ias 16 are. Ias 16 property, plant and equipment download pdf, 651kb. All the paragraphs have equal authority but retain the iasc format of the standard when it was adopted by the iasb.
Ias 16 property, plant and equipment the objective of this standard is to prescribe the accounting treatment for property. Ias 16 property, plant and equipment basis for conclusionscurrent document document type. The cost of an item of property, plant, and equipment shall be recognized as an asset only if it is probable that future economic benefits associated with the item will flow to the entity and. Jan 25, 2012 the bearer plant definition the amendment of ias 16 has changed the definition of biological assets to the class of property, plant, equipment that is use in an entitys operation. The subject matter for discussion on audit readiness this week is property, plant and equipment ppe. Ias 16 property, plant and equipment 2017 07 2 cost is the amount of cash or cash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when. For the requirements reference must be made to international financial reporting standards. Ias 16 was reissued in december 2003 and applies to annual periods. Dec 11, 2014 an overview of the requirements of ias16 including reference to ind as on property plant and equipment. We are pleased to provide you with the following comments with the aim of improving the consistent application and enforceability of ifrss.
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