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What measurement value is used for intial recognition of PPE? a- NRV b- Cost c- Fair Value d- Historical Cost

PPE stands for Property, Plant and Equipment

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تم إضافة السؤال من قبل Muhammad Faheem , Consultant- Accounts, Audit & Taxation , Basim Associates
تاريخ النشر: 2013/12/07
Rashad Moursi
من قبل Rashad Moursi , Finance Director & Business Development, International Business Transformer Owners Repr. - Hotels , Investment and financial

IAS-16  permites entities to chose between;

a- fair value model and 

b- cost model 

Menerva Melad
من قبل Menerva Melad , Account Executive, Key Accounts , Graphic Home Company

Initial measurement as per IAS16;

If assets is purchased than it should be recorded at cost. Cost element is not limited to purchase cost it includes all costs that are necessary to bring the asset to working condition for its intended use.

If the cost is deferred than the same should be recorded at present value.

Asad zaman
من قبل Asad zaman , Audit/Finance , Rafaqat Baber and co

initially cost and fair value of PPE id same.....these sort of problem arise in seusequent measurment of PPE.its upto company if they wish to use cost model or fair value model...hope that will help

Umer Aziz
من قبل Umer Aziz , Senior Accountant , TERNA Bahrain Holding - GEK Group (www.terna.gr)

at cost

SHAIKH MOHAMMED BASHEER AHMED SHAIKH
من قبل SHAIKH MOHAMMED BASHEER AHMED SHAIKH , Account Manager , Tarik Al Zahid Holding Company

Option B.  As per IAS16- PPE is iinitally measured at cost. 

An item of property, plant and equipment should initially be recorded at cost. [IAS16.15] Cost includes all costs necessary to bring the asset to working condition for its intended use. This would include not only its original purchase price but also costs of site preparation, delivery and handling, installation, related professional fees for architects and engineers, and the estimated cost of dismantling and removing the asset and restoring the site. 

 

Muhammad Tabassum Butt
من قبل Muhammad Tabassum Butt , Assistant Manager Audit , International Accountants (HLB International member firm)

IAS16 (Property Plant and Equipment-Para-15)

Measurement at recognition:

15) An item of property, plant and equipment that qualifies for recognition as an

asset shall be measured at its cost.

Hassan Abbas awan
من قبل Hassan Abbas awan , Senior Accountant , Green Valley premium hyper maket

Initial measurement as per IAS16;

If assets is purchased than it should be recorded at cost. Cost element is not limited to purchase cost it includes all costs that are necessary to bring the asset to working condition for its intended use.

If the cost is deferred than the same should be recorded at present value.

 

If an asset is exchanges for another asset than it should be measured at fair value but if transaction lack commercial substance or fair value isn’t available than it should be measured at carrying cost of asset given up.

Toyin Adun-FCA-MBA-Finance-CMA
من قبل Toyin Adun-FCA-MBA-Finance-CMA , Finance Manager , Emirates Business Group

Measurement at recognition IAS.: An item of property, plant and equipment that qualifies for recognition as an asset shall be measured at its cost.

 

The answer is Cost (b)

Danish Gazdar
من قبل Danish Gazdar , Manager Finance & Co.Secretary , TAF Foundation

its either on cost model or revaluation model.. read IAS16

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