Revisiting IAS 16, Property, Plant & Equipment
Continuing Learning Series
This article is a part of ACS Continuing Learning Series, which is a series of short articles, published by ACS Consulting at short regular intervals on a variety of subjects related to strategy, corporate finance, financial planning & analysis, business planning and performance management.
Subject: Financial Reporting
Relevance:
All accountants and accounting students.
Senior Reporting Personnel, CFOs & Auditors
Introduction
IAS 16 Property, Plant and Equipment provides an outline and guidelines on the accounting treatment for most types of property, plant and equipment or PP&E. 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.
IAS 16 was reissued in December 2003 and applies to annual periods beginning on or after 1 January 2005.
Objective & Scope of IAS 16?
Objective: The objective of IAS 16 is to prescribe the accounting treatment for property, plant, and equipment. The principal issues are: