Distinctive Financial Reporting FAC3702 Semesters 1 & 2 Department of Financial Accounting

LEARNING UNIT 1 – PROPERTY, PLANT AND EQUIPMENT LEARNING OUTCOMES Once you have studied and completed this course material, you should be able to:  account for property, plant and equipment, and depreciation in the financial statements of an entity in terms of the requirements of International Financial Reporting Standards.  account for revaluations of property, plant and equipment in the financial statements of an entity in terms of the requirements of International Financial Reporting Standards.  account for the deferred tax and tax implications in respect of property, plant and equipment. OVERVIEW This learning unit will be discussed under the following sections: A PROPERTY, PLANT AND EQUIPMENT 1.1 Objective – IAS 16.1 1.2 Scope – IAS 16.2–5 1.3 Definitions – IAS 16.6 1.4 Recognition of property, plant and equipment – IAS 16.7–14 1.4.1 Initial costs – IAS 16.11 1.4.2 Subsequent costs – IAS 16.12–14 1.5 Measurement at recognition – IAS 16.15–28 1.5.1 Elements of cost – IAS 16.16–22 1.5.2 Measurement of cost – IAS 16.23–28 1.6 Measurement after recognition – IAS 16.29–66 1.6.1 Cost model – IAS 16.30 1.6.2 Revaluation model – IAS 16.31–42 1.6.3 Depreciation – IAS 16.43–62 1.6.4 Impairment – IAS 16.63 1.6.5 Compensation for impairment – IAS 16.65–66 1.7 Derecognition – IAS 16.67–72 B REVALUATION MODEL – IAS 16.31–42 1.8 Introduction 1.9 Frequency of revaluations 1.10 Revaluation methods 1.10.1 Change in accounting policy 1.10.2 Residual value 1.10.3 Estimated useful life 1.10.4 Determination of replacement value 1.11 Revalue an entire class of property, plant and equipment – IAS 16.36–38 1.12 Revaluation surplus – IAS 16.39–42 1.13 Further examples 1.14 Summary of revaluations