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1.3 Accounting for assets and liabilities

1.3.1 Assets –

An asset is something containing economic value and/or future benefit. An asset can often

generate cash flows in the future, such as a piece of machinery, a financial security, or a patent.

Property, plant and equipment - recognition, capital and revenue, expenditure, measurement

{depreciation and revaluation), disposal and disclosures, property, plant and equipment

schedule

Property, Plant, and Equipment (PP&E) is a non-current, tangible capital asset shown on the

balance sheet of a business and is used to generate revenues and profits.

Recognition - Items of property, plant, and equipment should be recognized as assets when it is

probable that: [IAS 16.7]

 It is probable that the future economic benefits associated with the asset will flow to

the entity, and

 The cost of the asset can be measured reliably.

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