Spare parts, stand-by and servicing equipment

Learning objectives

• Determine whether spare parts and servicing equipment are property, plant and equipment or inventories.L2, L3

Normative references

• IAS 16 §8Spare parts, stand-by equipment and servicing equipment: recognised in accordance with IAS 16 when they meet the definition of property, plant and equipment, otherwise as inventory.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• 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?L3