IAS 16Chapter 2Lesson 1
What is property, plant and equipment? The vocabulary of measurement
Step 1 of 9Learning objectives
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The three conditions that make an item property, plant and equipment, the boundary with inventories and intangible assets, then the terms used to measure it: cost, residual value, depreciable amount, depreciation, useful life, carrying amount, recoverable amount and impairment loss, linked in a single calculation.
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Learning objectives
- Identify the three conditions in the definition of property, plant and equipment.
- Distinguish property, plant and equipment from inventory or an intangible asset based on intended use and the nature of the item.
- Explain the terms cost, residual value, depreciable amount, depreciation, useful life, carrying amount and recoverable amount.
- Calculate a depreciable amount, a depreciation charge and a carrying amount from simple data.