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Ias 16

The document outlines key points regarding IAS 16 on Property, Plant, and Equipment (PPE), including the costs included in asset valuation and criteria for future economic benefits. It discusses the calculation of carrying amounts under cost and revalued models, as well as the treatment of impairment losses and gains. Specifically, it details how impairment losses affect revalued assets and their impact on profit and loss accounts.

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hassaan nabeel
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11 views4 pages

Ias 16

The document outlines key points regarding IAS 16 on Property, Plant, and Equipment (PPE), including the costs included in asset valuation and criteria for future economic benefits. It discusses the calculation of carrying amounts under cost and revalued models, as well as the treatment of impairment losses and gains. Specifically, it details how impairment losses affect revalued assets and their impact on profit and loss accounts.

Uploaded by

hassaan nabeel
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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 Key points in the Answer Must Include:

1) According to IAS 16 PPE Cost of Asset includes all cost in bring that asset
2) Criteria’s e.g Probable of Future economic Benefit
3) Which cost should be included which should be not in Asset Value
4) Training and Advertisement not part goes SPL
5) When depreciation begins i.e when assets start to operate after its testing
Year End 30 Nov 2004

CV of Cost Model
CV=8 Million

CV under Revalued

8.8/8x1

8.8-1.1

CV = 7.7 Million

GAIN

And if Impairment is there Reduce gain first then rearming Imp must be expensed PL account

Imp loss 2.2 million IAS 16 if assets are on revalued model and if there has been a gain previously then
impairment will first decrease that loss to zero and if something is left it will go P/l Account

Gain=0.8 Million

Imp=2.2

=2.2-0.8

=1.4 Million must be Expensed out in P/L account


 Key points in the Answer Must Include:

1) Calculate CV under Cost Model


2) Calculate carrying amount of revalued asset
3) If there is any impairment loss of revalued asset goes to OCI first then remaining p/L account
4) Treatment of Impairment in case of Revalued asset where it goes
5) First it decrease the revalued amount or surplus if left goes to P/L account

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