Property, Plant & Equipment (IAS 16)

Property, plant and equipment is where most of a business's long-term money goes, and IAS 16 governs every stage of an asset's life. This chapter follows that life in order. It starts with recognition — what qualifies as PPE at all — and initial measurement: which costs are capitalised and which are expensed, including dismantling obligations and self-constructed assets. Depreciation comes next, first the methods and then the harder situations: subsequent expenditure that may or may not be capitalised, changes in estimates and methods, and component accounting, where one asset is depreciated as several. The second half covers what happens when value moves: the revaluation model and its surplus, impairment when an asset is worth less than its carrying amount, and derecognition when it is sold or scrapped. Presentation and disclosure follow, and the chapter ends with integrated capstones that take a single asset through its whole life.