This dissertation aims to summarise international critique, both positive and negative concerning the IAS 16: Property, Plant, and Equipment and to provide international recommendations on how the standard can be improved.
Submitted in partial fulfilment of the requirements for the National Diploma:
FINANCIAL ACCOUNTING:
(SAQA ID: 20366)
30 March 2023
DECLARATION BY STUDENT:
I declare that this min-dissertation submitted by me, is my own work, that I have referenced
all the sources that I have used, and that no part was previously submitted at any tertiary
institution.
Signature: Date:
,Acknowledgments
I wish to express my gratitude to the following two people, of whom I could not have
undertaken this journey.
My Supervisor, for his guidance and financial support, and my darling Mother, for her
endless belief in my abilities and keeping my spirits high.
i
,Abstract
The International Financial Reporting Standards (IFRS) have developed accounting
principles and rules, the IFRS is becoming the global standard for the preparation of an
entity's financial statements. These accounting standards provide a basis for the preparation
and presentation of financial statements, they ensure the financial information presented to
investors, lenders, government, financial institutions, employees and stakeholders meet the
information needs and they are reliable, relevant, comparable, and understandable.
The International accounting standard for IAS 16 Property, plant, and equipment (PPE),
represents a major asset in the financial statements. The standard prescribes the treatment
for PPE for users of financial statements to access information about an entity's investment
in PPE and changes in such investment. The standard covers the recognition of items of
PPE, calculations of the carrying amounts, and the calculations of any depreciation charges
and any applicable impairment losses.
This dissertation aims to summarise international critique, both positive and negative
concerning the IAS 16: Property, Plant, and Equipment and to provide international
recommendations on how the standard can be improved.
This research dissertation is based on secondary research and uses reliable secondary
research and qualitative research approaches to collect all the data.
ii
, Table of Content
Acknowledgments.................................................................................................................................... i
Abstract ................................................................................................................................................... ii
Table of Content .................................................................................................................................... iii
Abbreviations .......................................................................................................................................... 1
Chapter 1: Introduction .......................................................................................................................... 2
1.1 Background to the Study............................................................................................................... 2
1.2 IAS 16 – Brief overview ................................................................................................................. 2
1.3 Aims and objective of this study ................................................................................................... 3
Chapter 2: Literature Review .................................................................................................................. 4
2.1 Introductions ................................................................................................................................. 4
2.2 Key terms: IAS 16 .......................................................................................................................... 5
2.3 Class of Property, plant, and equipment ...................................................................................... 5
2.4 Recognition Process ...................................................................................................................... 6
2.5 Derecogintion of PPE – IAS 16....................................................................................................... 6
2.6 Disclosures .................................................................................................................................... 7
Chapter 3: Positive International critique concerning the standard (perceived strengths) ................. 10
3.1 Capital expenditures ................................................................................................................... 12
3.2 Accumulated depreciation .......................................................................................................... 14
3.3 Revaluation model definition...................................................................................................... 15
Chapter 4 Negative International critique concerning the standard (perceived weaknesses). ........... 20
4.1 The financial impact of PPE ......................................................................................................... 20
4.2 Unit of measure for recognition ................................................................................................. 21
4.3 Bearer Plants ............................................................................................................................... 27
Chapter 5 Practical Examples ................................................................................................................ 32
5.1 Example 1: BP.............................................................................................................................. 32
5.2 Example 2: Semrush Holdings ..................................................................................................... 33
Chapter 6: Finding and Recommendations .......................................................................................... 34
6.1 Conclusions ................................................................................................................................. 35
Bibliography ........................................................................................................................................ 37
Tables, Charts, and Graphs .................................................................................................................. 40
iii
Voordelen van het kopen van samenvattingen bij Stuvia op een rij:
Verzekerd van kwaliteit door reviews
Stuvia-klanten hebben meer dan 700.000 samenvattingen beoordeeld. Zo weet je zeker dat je de beste documenten koopt!
Snel en makkelijk kopen
Je betaalt supersnel en eenmalig met iDeal, creditcard of Stuvia-tegoed voor de samenvatting. Zonder lidmaatschap.
Focus op de essentie
Samenvattingen worden geschreven voor en door anderen. Daarom zijn de samenvattingen altijd betrouwbaar en actueel. Zo kom je snel tot de kern!
Veelgestelde vragen
Wat krijg ik als ik dit document koop?
Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.
Tevredenheidsgarantie: hoe werkt dat?
Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.
Van wie koop ik deze samenvatting?
Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper Sarah4Coffee. Stuvia faciliteert de betaling aan de verkoper.
Zit ik meteen vast aan een abonnement?
Nee, je koopt alleen deze samenvatting voor €17,19. Je zit daarna nergens aan vast.
