Summary of IAS 16 Property, Plant and Equipment - there is a nice long discussion in the comments below this summary; Fully Depreciated Assets Still in Use - what to do? All the paragraphs have equal authority. Property, Plant and Equipment. It will replace IAS 17 Leases for reporting periods beginning on or after 1 January 2019. (b) use of a single recognition principle is a straightforward approach. 31 March 2010 As the residual value and useful economic life estimates have changed during the year ended 2010, the depreciation charge will need to be recalculated. LKAS 16 should be read in the context of its objective and the Basis for Conclusions, the It can be applied before that date by entities that also apply IFRS 15 Revenue from Contracts with Customers. The IAS 16 requires the plant to be measured at its full cost of $350,000 ($300,000+$15,000+$35,000). This site uses cookies. … IAS 16 Property, Plant and Equipment The Board has not undertaken any specific implementation support activities relating to this Standard. Back to Course Next Lesson. The carrying value will now be spread according to the revised estimates. Free IFRS Quizzes IAS 16 – Property Plant and Equipment Quiz ) , () ) Previous Lesson. To address diversity in practice, the International Accounting Standards Board (the . IFRS 16 sets out a comprehensive model for the identification of lease arrangements - If you own assets with zero carrying amount, but they are still in use, there's something wrong about it. EC staff consolidated version as of 16 September 2009, EN – EU IAS 16 FOR INFORMATION PURPOSES ONLY 2 Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. Academia.edu is a platform for academics to share research papers. ias 16 solutions 01 TECHNICAL. to provide guidance on the accounting for such sale proceeds and the related production costs. LKAS 16 Sri Lanka Accounting Standard-LKAS 16 Property, Plant and Equipment Sri Lanka Accounting Standard LKAS 16 Property, Plant and Equipment is set out in paragraphs 1-81. The IFRS Interpretations Committee has previously considered a number of relevant issues that have been submitted by stakeholders. Assuming that Hotroad LLC prepares financial statements annually and the straight-line depreciation method is selected, the amount of annual depreciation expense is $50,000. 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. (c) retaining IAS 16’s general recognition principle and combining it with the covered by IAS 16’s general recognition principle. To find out more, see our Cookies Policy Terms & Conditions Articles. Annual depreciation expense = $350,000 ÷ 7 = $50,000 Sale proceeds no longer deducted from the cost of PPE before its intended use Definition Property, plant and equipment (PPE) are tangible assets that: a) are held for use to produce/supply goods and services, for rental to others, or for administrative purposes; and b) are expected to be used during more than one period. Taxation – IAS 12, IFRIC 23 27 Earnings per share – IAS 33 28 Balance sheet and related notes 29 Intangible assets – IAS 38 30 Property, plant and equipment – IAS 16 31 Investment property – IAS 40 32 Impairment of assets – IAS 36 33 Lease accounting – IAS 17, IFRS 16 34 Inventories – IAS 2 35 This solution had the following advantages: (a) use of IAS 16’s general recognition principle fits the . Framework. 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