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P. 13
PROPERTY, PLANT AND EQUIPMENT
Initial costs
• Sometimes entities are obliged to acquire certain
PPE items for safety or environmental reasons.
• Although such assets will not directly give rise to
increased future economic benefits embodied in a
specific asset itself, the entity is obliged to acquire such
assets for increased future economic benefits from
other assets.
• Consequently these assets meet the general recognition
criteria for assets and are therefore capitalised as assets.
• The resulting carrying amount of such an asset and
related assets is reviewed for impairment in accordance
with IAS 36
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