IAS 16Chapter 3Lesson 1
Recognising property, plant and equipment: criteria, spare parts, unit of measure, safety equipment
Step 1 of 10Learning objectives
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The two criteria that trigger recognition of property, plant and equipment as an asset and how they apply to all expenditure, initial or subsequent. Then three practical questions: spare parts and servicing equipment (asset or inventory?), unit of account and grouping of small items, and safety or environmental equipment with no direct benefit.
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Learning objectives
- Identify the two recognition criteria for property, plant and equipment and know that they apply to all expenditure, when it is incurred.
- Determine whether spare parts, stand-by or servicing equipment are property, plant and equipment or inventory.
- Choose an appropriate unit of account, in particular for items that are individually insignificant.
- Justify the recognition of safety or environmental equipment and document the analysis in a working paper.