WebUnder paragraph 16c of AASB 116, the cost of an item of PPE includes the initial estimated cost of dismantling, removing and restoring an item (i.e. make good costs), where the obligation was incurred either: when the item was acquired, or as a consequence of having used the item. Example 1: Make good costs Make good costs include the costs of:
Cost of Property, Plant and Equipment (IAS 16)
WebJun 28, 2024 · A company applies the general requirements of IAS 37 Provisions, Contingent Liabilities and Contingent Assets to recognise and measure a provision for an environmental or decommissioning obligation. A provision is recognised when: the company has a legal or a constructive obligation – e.g. to restore a site; it is probable … When you measured your provision successfully, now it’s time to recognize it. As written above, the standard IAS 16 requires recognizing initial estimate of decommissioning costs to the cost of an asset. The journal entry is therefore: 1. Debit Property, Plant and Equipment (nuclear power plant, oil rig, … See more The standard IAS 37 Provisions, Contingent Liabilities and Contingent Assetsrequires recognizing a provision when there is a liability – i.e. present obligation arising … See more Measurement of decommissioning provision is extremely demanding, difficult and there are a lot of uncertainties involved. Why? The main reason is that you try to measure the expenses to be incurred after the … See more Accounting for decommissioning is not an easy topic, because it involves a generous portion of uncertainty and estimates. On top of that, accounting for something that will happen in the far … See more First of all, you need to unwind the discount each year. It means charging an interest on your provision to build up your discounted liability to its future value. Secondly, don’t forget to charge depreciation on your … See more every hero mod
Recognition and Measurement of Leases (IFRS 16)
Webdecommissioning obligations. Determining the tax base of assets and liabilities An entity that applies IFRS 16 Leases recognises a right-of-use asset (lease asset) and a lease … WebSep 29, 2024 · These costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part … WebIAS 16 Property, Plant and Equipment, by adjusting the cost of the asset at the date of change. Some reinforced this point by arguing that a decommissioning obligation can be seen as a negative residual value. A prospective treatment would also make the accounting more closely convergent with US GAAP. Some responses drew attention to every hero has a story