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PROPERTY, PLANT AND EQUIPMENT

Recognition of PPE 16.7-14

• The cost of a PPE item shall be recognised as an asset if,

and only if:

• it is probable that future economic benefits associated with
the item will flow to the entity (this will usually be the case

where the risks and rewards of ownership have passed to the

entity); and

• the cost of the item can be measured reliably.

• An entity evaluates under this recognition principle all

its PPE costs at the time they are incurred.

• These costs include costs incurred initially to acquire or

construct a PPE item and costs incurred subsequently to add

to, replace part of, or service it (under certain circumstances).

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