IFRS Learning Module 7: Property, Plant and Equipment (Course Id 2439)

IFRS Learning Modules are a series of courses that provide in-depth overviews of various topics related to International Financial Reporting Standards (“IFRS”). IFRS represents the global accounting principles that provide the foundation for most of the world’s financial reporting. These Standards establish the recognition, measurement, presentation and disclosure requirements for transactions and events reflected in IFRS financial statements.

Module 7 of the IFRS Learning Module series presents an overview of IAS 16 Property, Plant and Equipment, the accounting standard for classifying and measuring property, plant and equipment (also known as ‘fixed assets’) in IFRS financial statements. The course also discusses the IASB’s and FASB’s efforts towards achieving convergence in fixed assets reporting.

NASBA QAS - Text - NASBA Registry - 2439

Module Learning Objectives

• Explain the proper accounting treatment for acquisitions of property, plant and equipment (and other associated costs) under IFRS.
  
• Calculate depreciation using the methods permitted under IAS 16.
  
• Describe the process for determining whether or not a long-lived asset is impaired under IAS 36.
  
• Distinguish between the ‘cost’ and ‘revaluation’ accounting models (as described in IAS 16).
  
• Describe the similarities and differences between IFRS and U.S. GAAP in the area of property, plant and equipment.
  

Module 7:  Property, Plant and Equipment

1.0   Introduction to IAS 16

1.1   Objective

1.2   Scope

2.0   Acquisition of Property, Plant and Equipment

2.1   Determination of cost

2.2   Lump-sum purchases

2.3   Interest costs during construction (IAS 23)

2.4   Deferred-payment contracts

2.5   Issuance of Shares

2.6   Non-monetary asset exchanges

3.0   Costs after Acquisition

3.1   Additions

3.2   Improvements and replacements

3.3   Rearrangement and reorganization

3.4   Repairs

4.0   Depreciation Factors

4.1   Depreciation defined

4.2   Depreciable amount of an asset

4.3   Useful life of an asset

5.0   Depreciation Methods

5.1   Straight-line method

5.2   Diminishing-balance methods

5.3   Activity-based method

6.0   Impairments

7.0   Revaluations

8.0   Disposal of Property, Plant and Equipment

9.0   Disclosures

10.0   IFRS & U.S. GAAP Convergence

11.0   Module Summary

10.0   Review Answers

Glossary