IFRS: Property, Plant and Equipment
This course will enable you to:
- Recognise what the overall rule for a PPE asset is
- Understand how the cost of an asset is charged against profits in a way that reflects its usage
- Define key concepts in various PPE disclosures such as impairments and business combinations
- Decide if an asset is impaired and if so, what actions to follow
- Identify key rules with relation to estimating future cash flows, and recognising and measuring impairment losses
Property, Plant and Equipment (PPE) plays a crucial role in the financial statements of many entities. They often make up one of the largest items on the statement of financial position, and also play a big part in the statement of comprehensive income through the charging of depreciation and impairment. This course looks at accounting for PPE through IAS 16, which covers PPE specifically, and IAS 36, which covers the connected issue of impairment.
Recognition Rules for PPE
- What are the recognition rules for PPE?
- Objective and scope of IAS 16
- Capitalisation thresholds
- Componentisation of PPE
- Splitting PPE assets into components
- Initial PPE measurements
- What is the valuation of assets?
- Measuring assets in accounting terms
- Sianís brief
- Derecognising a PPE Asset
- Grown Inc
- A bit of recognition
- What is depreciation?
- What are the depreciation methodologies?
- Reviewing asset lives and residual value
- Changes to useful life
- Residual value
- Accounting for depreciation
- Something of value
- What are the PPE disclosure requirements?
- Business combination
- Net foreign exchange
- What other disclosure requirements are there?
- Disclosures relating to revaluations
- Security against liabilities
- Contractual commitments
- Revalued assets
- Honesty is the best policy
- What are impairments?
- Overall objective of IAS 36
- How do you know if an asset is Impaired?
- Impairment indicators
- Measuring the recoverable amount
- Calculating value in use
- Estimating future cash flows
- Impairment provision
- Measuring an impairment loss
- Depreciation and impairment
- Looking ahead
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