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PAS16 :
Property, Plant and Equipment
In Partial Fulfilment of the Requirements
in Problems in Financial Reporting.
Date: October 12, 2016
Aguhob, Renz
Carandang, Jamil
Inventor, Maria Jeanette
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Opening
Prayer
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Together, let us pray our
Lasallian prayer:
(All) I will continue, O my God, to
do all my actions for the love of
You.
Scope
Definition of terms
Objective
Initial measurement
Measurement subsequent to initial recognition
Depreciation
Impairment
Recoverability of the carrying amount
Derecognition (retirements and disposals)
Amendments
Disclosure
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PAS16 : Property Plant and Equipment
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PAS16 : Scope
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PAS16 : Definitions of Terms
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PAS16 : Objective
o Recognition of assets
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PAS16 : Recognition of cost of PPE as assets
• It is probable that future economic benefits associated with the item will
flow to the entity; and
This recognition principle shall be applied to all costs at the time they are incurred,
both incurred initially to acquire or construct an item of PPE and incurred
subsequently after recognition to add to, replace part of or service it.
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PAS16 : Initial measurement
1. Purchase Price
• import duties, non-refundable purchase taxes, after deducting trade
discounts and rebates
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PAS16 : Initial measurement
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PAS16 : Initial measurement
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PAS16 : Measurement subsequent to initial
recognition
o Cost model
-> The asset is carried at cost less accumulated depreciation and
impairment. [IAS 16.30]
o Revaluation model
-> The asset is carried at a revalued amount, being its fair value at the
date of revaluation less subsequent depreciation and impairment,
provided that fair value can be measured reliably. [IAS 16.31]
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PAS16 : Measurement subsequent to initial
recognition - Revaluation Model
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PAS16 : Measurement subsequent to initial
recognition - Revaluation Model
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PAS16 : Depreciation
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PAS16 : Depreciation
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PAS16 : Impairment
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PAS16 : Recoverability of the carrying amount
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PAS16 : Recoverability of the carrying amount
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PAS16 : Derecognition (retirements and
disposals)
An asset should be removed from the statement of financial
position on disposal or when it is withdrawn from use and no future
economic benefits are expected from its disposal. The gain or loss on
disposal is the difference between the proceeds and the carrying amount
and should be recognised in profit and loss. [IAS 16.67-71]
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PAS16 : Amendments
The IASB decided that bearer plants should be accounted for in the
same way as property, plant and equipment in PAS 16 Property, Plant and
Equipment, because their operation is similar to that of manufacturing.
Consequently, the amendments include them within the scope of PAS 16,
instead of PAS 41. Since bearer plants will now be within the scope of PAS
16 and will be subject to all of the requirements therein. This includes the
ability to choose between the cost model and revaluation model for
subsequent measurement.
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PAS16 : Amendments
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PAS16 : Disclosure
For each class of property, plant, and equipment, disclose: [IAS 16.73]:
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PAS16 : Disclosure
Additional disclosures:
restrictions on title and items pledged as security for liabilities
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Sample Disclosure – SMB 2015 Annual Report
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Sample Disclosure – SMB 2015 Annual Report
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Sample Disclosure – SMB 2015 Annual Report
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Thank You!
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