CERTYNEX IFRS ACADEMY

A power plant operator buys a spare turbine, kept on stand-by to quickly replace the main turbine in case of breakdown. Once installed, it would be used over several periods. It also buys seals and filters consumed during monthly servicing. Which classification is correct?

Both as inventories, because spare parts are always inventories.

The spare turbine as property, plant and equipment; the seals and filters as inventories, expensed when consumed.

Both as property, plant and equipment, because they all relate to the operation of the plant.

The spare turbine expensed on purchase, because it is not yet in use.