PRACTICE TOPIC
Property Plant and Equipment
Practice Property Plant and Equipment with 10 accounting challenges on Accountely — instant IAS/IFRS-compliant scored feedback on every submission.
What property plant and equipment covers
Property, plant and equipment are tangible assets held for use rather than sale, carried initially at cost. Cost includes everything needed to bring the asset to the location and condition for its intended use — purchase price, delivery, installation and testing — but not the costs of running it once it is operating. Subsequent spending is capitalised only if it enhances the asset beyond its original standard.
Challenges here cover initial measurement, subsequent expenditure, depreciation and disposal.
Where marks are usually lost
- Expensing costs that should form part of the asset's initial cost.
- Capitalising routine repairs and maintenance.
- Omitting the removal of accumulated depreciation on disposal, so the gain or loss is wrong.
Further readingIAS 16: initial cost and depreciation
10 Property Plant and Equipment practice challenges
TitleTypeDifficulty
Aldergrove Farms - Machinery: Purchase, Depreciation and Disposal (IAS 16) JournalmediumKelmscott Mining - Impairment of Equipment (IAS 36) JournalmediumGlenmoor Logistics - Two-Step Impairment Test (US GAAP) US GAAPJournalhardThorncliff Estates - Land Revaluation Surplus (IAS 16) JournalmediumEquipment Disposal — Gain on Sale Multi-StatementmediumStonebrook Builders - Capitalizing Interest on Self-Constructed Assets (US GAAP) US GAAPJournalhardIronclad Manufacturing - Double-Declining-Balance Depreciation (US GAAP) US GAAPJournalmediumWyndcliffe Printing - Impairment, Value in Use and a Capped Reversal (IAS 36) Multi-StatementhardCopperbeech Developments - Borrowing Costs With a Suspension and Investment Income (IAS 23) Multi-StatementhardTamarind Properties - Investment Property at Fair Value and a Transfer From Owner-Occupied Property (IAS 40) Multi-Statementhard