Welcome
1
Course Instructor
Ms. Shahreen Sonia
Lecturer, Advanced Accounting
Department of Business Administration (DBA)
Green Unive...
Name ID
Md. Moazzem Hossain 110106034
Md. Anqur Chowdhury 110106027
3
Presentation Topics
Serial No. Name of Topic Slide No.
01 OVERVIEW 5
02 DEFINITION 6, 7, 8 & 9
03 RECOGNITION 10
04 INITIA...
Overview
IAS 16 Property, Plant and Equipment
outlines the accounting treatment for most
types of property, plant and equi...
DEFINITION
Property, plant and equipment are tangible items that:
– are held for use in the production or supply of
goods ...
DEFINITION (Contd.)
• Carrying amount is the amount at which an
asset is recognised after deducting any
accumulated deprec...
DEFINITION (Contd.)
• Depreciable amount is the cost of an asset, or
other amount substituted for cost, less its residual
...
DEFINITION (Contd.)
• Recoverable amount is the higher of an
asset’s net selling price and its value in use.
• The residua...
RECOGNITION
Items of property, plant, and equipment
should be recognized as assets when it
is probable that:
• It is proba...
INITIAL MEASUREMENT
If payment for an item of property, plant, and
equipment is deferred, interest at a market rate
must b...
MEASUREMENT SUBSEQUENT TO
INITIAL RECOGNITION
• Cost model. The asset is carried at cost less
accumulated depreciation and...
RECOVERABILITY OF THE
CARRYING AMOUNT
IAS 16 Property, Plant and Equipment
requires impairment testing and, if necessary,
...
DISCLOSURE
1. Information about each class of
property, plant and equipment.
2. Additional disclosures.
3. Revalued proper...
DISCLOSURE (Contd.)
1. Information about each class of property, plant
and equipment.
For each class of property, plant, a...
DISCLOSURE (Contd.)
2. Additional disclosures.
The following disclosures are also required:
Restrictions on title and ite...
DISCLOSURE (Contd.)
3. Revalued property, plant and equipment.
If property, plant, and equipment are stated at
revalued am...
Any Question???
18
Thank You…
19
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Property, Plant & Equipment IAS 16

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Property, Plant & Equipment IAS 16

  1. 1. Welcome 1
  2. 2. Course Instructor Ms. Shahreen Sonia Lecturer, Advanced Accounting Department of Business Administration (DBA) Green University of Bangladesh (GUB) 2
  3. 3. Name ID Md. Moazzem Hossain 110106034 Md. Anqur Chowdhury 110106027 3
  4. 4. Presentation Topics Serial No. Name of Topic Slide No. 01 OVERVIEW 5 02 DEFINITION 6, 7, 8 & 9 03 RECOGNITION 10 04 INITIAL MEASUREMENT 11 05 MEASUREMENT SUBSEQUENT TO INITIAL RECOGNITION 12 06 RECOVERABILITY OF THE CARRYING AMOUNT 13 08 DISCLOSURE 14, 15, 16 & 17 09 ANY QUESTION & THANK YOU SLIDE 18 & 19 4
  5. 5. Overview IAS 16 Property, Plant and Equipment outlines the accounting treatment for most types of property, plant and equipment. Property, plant and equipment is initially measured at its cost, subsequently measured either using a cost or revaluation model, or depreciated so that its depreciable amount is allocated on a systematic basis over its useful life. 5
  6. 6. DEFINITION Property, plant and equipment are tangible items that: – are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and – are expected to be used during more than one period. Useful life is: – the period over which an asset is expected to be available for use by an entity; or – the number of production or similar units expected to be obtained from the asset by an entity. 6
  7. 7. DEFINITION (Contd.) • Carrying amount is the amount at which an asset is recognised after deducting any accumulated depreciation and accumulated impairment losses. • 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. 7
  8. 8. DEFINITION (Contd.) • Depreciable amount is the cost of an asset, or other amount substituted for cost, less its residual value. • Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. • Fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction. • An impairment loss is the amount by which the carrying amount of an asset exceeds its recoverable amount. 8
  9. 9. DEFINITION (Contd.) • Recoverable amount is the higher of an asset’s net selling price and its value in use. • The residual value of an asset is the estimated amount that an entity would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life. 9
  10. 10. RECOGNITION Items of property, plant, and equipment should be recognized as assets when it is probable that: • It is probable that the future economic benefits associated with the asset will flow to the entity, and • The cost of the asset can be measured reliably. 10
  11. 11. INITIAL MEASUREMENT If payment for an item of property, plant, and equipment is deferred, interest at a market rate must be recognized or imputed. • The exchange transaction lacks commercial substance or • The fair value of neither the asset received nor the asset given up is reliably measurable. If the acquired item is not measured at fair value, its cost is measured at the carrying amount of the asset given up. 11
  12. 12. MEASUREMENT SUBSEQUENT TO INITIAL RECOGNITION • Cost model. The asset is carried at cost less accumulated depreciation and impairment. • Revaluation model. The asset is carried at a revalued amount, being its fair value at the date of revaluation less subsequent depreciation and impairment, provided that fair value can be measured reliably. 12
  13. 13. RECOVERABILITY OF THE CARRYING AMOUNT IAS 16 Property, Plant and Equipment requires impairment testing and, if necessary, recognition for property, plant, and equipment. An item of property, plant, or equipment shall not be carried at more than recoverable amount. Recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. 13
  14. 14. DISCLOSURE 1. Information about each class of property, plant and equipment. 2. Additional disclosures. 3. Revalued property, plant and equipment. 14
  15. 15. DISCLOSURE (Contd.) 1. Information about each class of property, plant and equipment. For each class of property, plant, and equipment disclose: basis for measuring carrying amount. depreciation method(s) used. useful lives or depreciation rates. gross carrying amount and accumulated depreciation and impairment losses. 15
  16. 16. DISCLOSURE (Contd.) 2. Additional disclosures. The following disclosures are also required: Restrictions on title and items pledged as security for liabilities Expenditures to construct property, plant, and equipment during the period Contractual commitments to acquire property, plant, and equipment Compensation from third parties for items of property, plant, and equipment that were impaired, lost or given up that is included in profit or loss. 16
  17. 17. DISCLOSURE (Contd.) 3. Revalued property, plant and equipment. If property, plant, and equipment are stated at revalued amounts, certain additional disclosures are required: The effective date of the revaluation Whether an independent valuer was involved For each revalued class of property, the carrying amount that would have been recognized had the assets been carried under the cost model The revaluation surplus, including changes during the period and any restrictions on the distribution of the balance to shareholders. 17
  18. 18. Any Question??? 18
  19. 19. Thank You… 19
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