Subsequent expenditure on property, plant and equipment

Under IAS 16, recognise expenditure in the carrying amount only when the asset recognition criteria are met; expense day-to-day servicing costs as incurred. For a qualifying replacement, derecognise the carrying amount of the replaced part. An improvement, major inspection or replacement needs assessment of its specific facts; merely spending money on an asset is not enough to establish capitalisation. When a major inspection is required to continue operating an item and its cost meets the recognition criteria, recognise that cost and derecognise any remaining carrying amount of the previous inspection component, even if it was not identified separately when the item was acquired.