PPE -Before classifying an asset as ppe, The asset has to meet the asset definition and the recognition criteria 1.initial measurement. -the asset is measured @ cost on acquisition date. -remember acquisition date is the date that risk and rewards of ownership transfer from the seller to the buyer. -cost comprises of all directly attributable cost E.g. cost price, transports and etc,but excluding all refundable taxes e.g vat 2.subsequent measurement. -expenditure after initial measurement. -the entity cannot capitilise expenditure for day-to-day servicing of the asset e.g maintenance costs. -we are allowed to capitilise cost incurred for the increase of the future economic benefits expected from the asset or output capacity 3. measurement models #cost model -the asset is subsequently measured @ cost less acc depreciation and impairments #revaluation model -the asset is measured @ revalued amount, which is the fair value of the asset less acc dep and impairment -the increase in the carrying amount is recognized in the Soci as other comprehensive income(as a result of revaluation surplus) 4.Depreciation -we start depreciating we an asset is ready for use,NOT when we start Using it. -we stop depreciating if -the asset is fully depreciated -the asset meet the criteria as held for sale -when the asset is sold thank you Prof-Cee new admin
Posted on: Sat, 17 Aug 2013 12:16:04 +0000
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