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Tangible non-current assets

Recognition and initial measurement

1.1 Recognition

Property plant and equipment should be recognised as an asset when
there is

 a probable flow of future economic benefit and

 a reliable measure of cost

1.2 Initial measurement

Property, plant and equipment should initially be measured at cost. Cost should
include all directly attributable costs necessary to bring the asset into use.

1.3 Subsequent expenditure

Subsequent expenditure should only be capitalised if it

 enhances the asset’s economic benefits

 relates to an overhaul or major safety inspection

 replaces a component of a complex asset

Subsequent expenditure not capitalised should be charged to the statement of profit
or loss as revenue expenditure.

Illustrations and further practice

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