Page 162 - F1 Integrated Workbook STUDENT 2018

Chapter 10

Initial measurement

2.1 Initial recognition

In accordance with IAS 16 Property, Plant and Equipment an asset should be
recognised as an asset when:

 it is probable that future economic benefits will flow to the entity and

 the cost of the asset can be measured reliably

In accordance with IAS 16 Property, Plant and Equipment, the asset should initially
be measured at its cost. This should include:

 purchase price

 directly attributable costs to bring asset to present location and condition

 the initial estimate of the cost of dismantling and removing the item and
restoring the site, where there is an obligation to incur such costs.

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