This presentation is on Non current Assets

1. NON CURRENT ASSETS

2.  IAS 16- PROPERTY ,PLANT AND EQUIPMENT
 IAS 40- INVESTMENT PROPERTY
 INTANGIBLE ASSETS
 IMPAIREMENT OF ASSETS
 NON CUURENT ASSETS HELD FOR SALE (IFRS 5)

3. IAS 16-PROPERTY PLANT & EQUIPMENT
IAS 16 defines property, plant and equipment 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
• are expected to be used during more than one period'

4. IAS 16-PROPERTY PLANT & EQUIPMENT
Initial recognition
An item of property, plant and equipment should be recognised as an asset
when:
• it is probable that the asset's future economic benefits will flow to the
entity
• the cost of the asset can be measured reliably

5. IAS 16-PROPERTY PLANT & EQUIPMENT
Measurement after initial recognition
• the cost model
• the revaluation model.
Under the cost model, property, plant and equipment is held at cost less
any accumulated depreciation.
Under the revaluation model, property, plant and equipment is carried
at fair value less any subsequent accumulated depreciation.

6. IAS 16-PROPERTY PLANT & EQUIPMENT
DEPRECIATION
• Depreciation is charged to the statement of profit or loss, unless it is
included in the carrying amount of another asset.
• IAS 16 says that depreciation must be allocated on a systematic basis
reflecting the pattern in which the asset’s future economic benefits are
expected to be consumed.
• Depreciation begins when the asset is available for use and continues
until the asset is derecognised, even if it is idle.

7. IAS 16-PROPERTY PLANT & EQUIPMENT
DEPRECIATION ON SEPARATE COMPONENTS
Certain large assets are in fact a collection of smaller assets, each with a
different cost and useful life. For example, an aeroplane consists of an
airframe (which may last for 40 years or so) plus engines, radar
equipment, seats, etc. all of which have a relatively short life. Instead of
calculating depreciation on the aeroplane as a whole, depreciation is
charged on each component (airframe, engines, etc.).

8. IAS 16-PROPERTY PLANT & EQUIPMENT
DERECOGNITION
IAS 16 says that an asset should be derecognised when disposal occurs,
or if no further economic benefits are expected from the asset's use or
disposal.
• The gain or loss on derecognition of an asset is the difference
between the net disposal proceeds, if any, and the carrying amount
of the item.
• When a revalued asset is disposed of, any revaluation surplus may
be transferred directly to retained earnings, or it may be left in the
revaluation surplus within other components of equity.

9. IAS 16-PROPERTY PLANT & EQUIPMENT
DISCLOSURE REQUIREMENTS
Disclosures required by IAS 16 include:
• the measurement bases used
• depreciation methods, useful lives and depreciation rates
• a reconciliation of the carrying amount at the beginning and end of
the period.
If items of property, plant and equipment are stated at revalued
amounts,information about the revaluation should also be disclosed.

10. IAS 40- INVESTMENT PROPERTY
IAS 40 Investment Property relates to 'property (land or buildings) held
(by the owner or by the lessee as a right-of-use asset) to earn
rentals or for capital appreciation or both’.
The following are not investment property:
• property held for use in the production or supply of goods or services
or for administrative purposes (IAS 16 Property, Plant and
Equipment applies)
• property held for sale in the ordinary course of business or in the
process of construction of development for such sale (IAS 2
Inventories applies)

11. IAS 40- INVESTMENT PROPERTY
Measurement
On recognition, investment property shall be recognised at cost.
After recognition an entity may choose either:
The policy chosen must be applied to all investment properties.
If the cost model is chosen, investment properties are held at cost less
accumulated depreciation. No revaluations are permitted.
Change from one model to the other is permitted only if this results in a
more appropriate presentation. IAS 40 notes that this is highly unlikely for
a change from the fair value model to the cost model.
• the cost model
• the fair value model.

12. IAS 40- INVESTMENT PROPERTY
The fair value model
Under the fair value model, the entity remeasures its investment
properties to fair value each year. No depreciation is charged.
All gains and losses on revaluation are reported in the statement of profit
or loss.
If, in exceptional circumstances, it is impossible to measure the fair value
of an individual investment property reliably then the cost model should be
adopted.

13. IAS 40- INVESTMENT PROPERTY
TRANSFERS
• Transfer from investment property to owner-occupied property
• Transfer from investment property to inventory
• Transfer from owner-occupied property to investment property to
be carried at fair value
• Transfer from inventories to investment property to be carried at fai
value

14. IAS 40- INVESTMENT PROPERTY
DISCLOSURE REQUIREMENT
In respect of investment properties, IAS 40 says that an entity must
disclose:
• whether the cost or fair value model is used
• amounts recognised in profit or loss for the period
• a reconciliation between the carrying amounts of investment
property at the beginning and end of the period.

15. INTANGIBLE ASSETS
An intangible asset is defined as 'an identifiable non-monetary asset
without physical substance' (IAS 38, para 8).
An intangible asset is identifiable if it:
• 'is separable (capable of being separated and sold, transferred,
licensed, rented, or exchanged, either individually or as part of a
package), or
• it arises from contractual or other legal rights, regardless of
whether those rights are transferable or separable from the entity
or from other rights and obligations' (IAS 38, para 12).

16. INTANGIBLE ASSETS
MEETING THE RECOGNITION CRITERIA
(a)Identifiability
(b)Control
(c)Probable future economic benefits
(d)Reliable measurement

17. INTANGIBLE ASSETS
Initial recognition
When an intangible asset is initially recognised, it is measured at cost.
Subsequent recognition
After recognition, an entity must choose either the cost model or the
revaluation model for each class of intangible asset.
The revaluation model
The revaluation model can only be adopted if fair value can be
determined by reference to an active market. An active market is one
where the products are homogenous, there are willing buyers and sellers
to be found at all times, and prices are available to the public.

18. INTANGIBLE ASSETS
Amortisation
An entity must assess whether the useful life of an intangible asset is finite or
indefinite.
• An asset with a finite useful life must be amortised on a systematic basis over
that life. Normally the straight-line method with a zero residual value should be
used. Amortisation starts when the asset is available for use.
• An asset has an indefinite useful life when there is no foreseeable limit to the
period over which the asset is expected to generate net cash inflows. It should
not be amortised, but be subject to an annual impairment review.

19. INTANGIBLE ASSETS
IAS 38 states that an entity must disclose:
• The amount of research and development expenditure expensed in the
period
• The amortisation methods used
• For intangible assets assessed as having an indefinite useful life,the reasons
supporting that assessment
• The date of any revaluations, if applicable, as well as the methods and
assumptions used
• A reconciliation of the carrying amount of intangibles at the beginning and
end of the reporting period.

20. Impairment of assets (IAS 36)
Impairment is a reduction in the recoverable amount of an asset or
cashgenerating unit below its carrying amount.
IAS 36 Impairment of Assets says that an entity should carry out an
impairment review at least annually if:
• an intangible asset is not being amortised because it has an indefinite
useful life
• goodwill has arisen on a business combination.

21. Non-current assets held for sale (IFRS 5)
A disposal group is a group of assets (and possibly liabilities) that the entity intends to
dispose of in a single transaction.
Classification as 'held for sale'
IFRS 5 requires the following conditions to be met before an asset or disposal group
can be classified as ‘held for sale’:
• The item is available for immediate sale in its present condition.
• The sale is highly probable.
• Management is committed to a plan to sell the item.
• An active programme to locate a buyer has been initiated.
• The item is being actively marketed at a reasonable price in relation to
its current fair value

22. Non-current assets held for sale (IFRS 5)
In the period in which a non-current asset or disposal group has
been classified as held for sale, or sold, IFRS 5 says that the entity
must disclose:
• a description of the non-current asset (or disposal group)
• a description of the facts and circumstances of the sale or
expected
sale
• any impairment losses or reversals recognised.