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IAS 16 Property, Plant and Equipment

International Accounting Standard 16

Overview of IAS 16

  • Issued: in 1982; re-issued in 1993 and 2003, followed by amendments
  • Effective date: 1 January 2005
  • What it does:
    • It prescribes the accounting treatment for property, plant and equipment;
    • It sets the initial recognition criteria related to an item of property, plant and equipment and deals with subsequent costs;
    • It prescribes the rules for initial measurement of property, plant and equipment (components of cost)
    • In relation to subsequent measurement, it permits two models:
      1. Cost model: The asset is carried at its cost less accumulated depreciation and impairment loss.
      2. Revaluation model: The asset is carried at a revalued amount calculated as fair value at the date of revaluation less subsequent accumulated depreciation and impairment loss.

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