Recognition subsequent costs IN6 An entity evaluates under the general

Recognition subsequent costs in6 an entity evaluates

This preview shows page 2 - 4 out of 30 pages.

Recognition: subsequent costs IN6     An entity evaluates under the general recognition principle all property, plant and equipment costs  at the time they are incurred. Those costs include costs incurred initially to acquire or construct  an item of property, plant and equipment and costs incurred subsequently to add to, replace part 
Image of page 2
of, or service an item. The previous version of  IAS 16  contained two recognition principles. An  entity applied the second recognition principle to subsequent costs. Measurement at recognition: asset dismantlement, removal and restoration costs IN7     The cost of an item of property, plant and equipment includes the costs of its dismantlement,  removal or restoration, the obligation for which an entity incurs as a consequence of installing the  item. Its cost also includes the costs of its dismantlement, removal or restoration, the obligation  for which an entity incurs as a consequence of using the item during a particular period for  purposes other than to produce inventories during that period. The previous version of  IAS 16   included within its scope only the costs incurred as a consequence of installing the item. Measurement at recognition: asset exchange transactions IN8     An entity is required to measure an item of property, plant and equipment acquired in exchange for  a non-monetary asset or assets, or a combination of monetary and non-monetary assets, at fair  value unless the exchange transaction lacks commercial substance. Under the previous version  of  IAS 16 , an entity measured such an acquired asset at fair value unless the exchanged assets  were similar. Measurement after recognition: revaluation model IN9     If fair value can be measured reliably, an entity may carry all items of property, plant and  equipment of a class at a revalued amount, which is the fair value of the items at the date of the  revaluation less any subsequent accumulated depreciation and accumulated impairment losses.  Under the previous version of  IAS 16 , use of revalued amounts did not depend on whether fair  values were reliably measurable. Depreciation: unit of measure EY Q&A IN10     An entity is required to determine the depreciation charge separately for each significant part of  an item of property, plant and equipment. The previous version of  IAS 16  did not as clearly set  out this requirement.
Image of page 3
Image of page 4

You've reached the end of your free preview.

Want to read all 30 pages?

  • Spring '13
  • ArmeeJayCresmundo
  • item, Plant and Equipment

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes