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Dear Sir,
Please, explain why in acca article the link of it is : https://www.accaglobal.com/uk/en/student/exam-support-resources/fundamentals-exams-study-resources/f7/technical-articles/ppe.html
In the second example (Construction of Deb and Ham’s new store), cost of land is included in cost of the store. Is it a mistake or something special with it cause IAS 16 requires them to be reported separately.
Thanks for your help!
I believe that land held as a separate asset is shown separately. But land upon which a self-constructed asset is located becomes part of the PPE
For the purposes of calculating depreciation the land element would be excluded from the aggregate store capitalised value and depreciation calculated therefore on the reduced amount after the deduction of the land cost
OK?
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