IAS I6 Property, Plant and Equipment

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1. Property, plant and equipment are tangible items that
   a: are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and

    b: are expected to be used during more than one period.
   

   The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if:

    a: it is probable that future economic benefits associated with the item will flow to the entity; and
    b: the cost of the item can be measured reliably.
   Measurement at recognition: An item of property, plant and equipment that qualifies for recognition as an asset shall be measured at its cost.
           The cost of an item of property, plant and equipment is the cash price equivalent at the recognition date.
               If payment is deferred beyond normal credit terms, the difference between the cash
   price equivalent and the total payment is recognised as interest over the period of credit unless such interest is
   capitalized in accordance with IAS 23.
   The cost of an item of property, plant and equipment comprises:
   a: Its purchase price, including import duties and non-refundable purchase taxes, after deducting trade
   discounts and rebates.
   b: Any costs directly attributable to  bringing the asset to the location and condition necessary for it to be
   capable of operating in the manner intended by management.
   c: The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is
   located, the obligation for which an entity incurs either when the item is acquired or as a consequence of the accounting treatment for property, plant and equipment .
   

   1. Objectives of IAS 16

      The objective of IAS 16 is to prescribe the accounting treatment for property, plant, and equipment. The principal issues are the recognition of assets, the determination of their carrying amounts, and the depreciation charges and impairment losses to be recognized in relation to them.

      The Initial Measurement of Property, Plant and Equipment.

      IAS 16 requires that PPE should initially be measured at cost. The cost of an items of PPE comprised.

      The cost of purchased net of any trade discount plus any import duties and non-refundable sales taxes.

      Any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended management.