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PROPERTY, PLANT AND EQUIPMENT

Recognition of PPE 16.7-14

• Spare parts and servicing equipment do not

normally meet the definition of PPE as they are

used in one accounting period.

• They are normally carried in inventory and recognised in

profit and loss as and when it is used.

• However, major spare parts and stand-by equipment

qualify as PPE when an entity expects to use them

during more than one period.

• Similarly, if the spare parts and servicing equipment can

be used only in connection with a certain PPE item, they

are accounted for as PPE.

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