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à Tangible assets
à Used in the normal business operations
a. production or supply of goods and services
b. for rental to others
c. for administrative purposes
à Expected to be used for more than one period
RECOGNITION
js stated in Pj 16 paragraph 7
à The cost of an item of Property, Plant and Equipment
shall be recognized as an asset if & only if:
a. it is probable that future economic benefits
associated with the item will flow to the entity
b. the cost of the item can be measured reliably
B. Revaluation hodel
Fair Value Less ubsequent jccumulated
Depreciation & Impairment Loss
Fair Value (harket Value) is determined
by appraisal
à If there is no market-based evidence of fair
value, it should be estimated using an income or
a depreciated replacement cost
à If
an item of PPE is revalued, all the
member of its class should be revalued
à Ifthe carrying amount increases due to
revaluation, the increase must be credited
directly in equity under the heading
Revaluation urplus
1. asset is disposed
2. or when the asset is being used by
the entity; the amount of revaluation
surplus transferred would be the difference
between depreciation based on
revalued carrying amount and depreciation
based on original cost
Depreciation
à Parts of an item of PPE is to be depreciated if they
have significant cost that are related to the total
cost of PPE