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Hello sir,
Under IAS 16, we need to derecognise the inspection costs from CV of the asset and recognise with the replaced inspection costs.
For eg. initially the costs was 2000 and day after 5 years, inspection costs have come to 1500.We replace 2000 with 1500 right. Now what should we do with the remaining 500? Is it expenses to P&L?
Thanks
PPE is just a single balance including inspection costs – they would then be depreciated over a suitable period
I’ve never seen this examined – do you have an exam question in mind?@stephenwidberg said:
PPE is just a single balance including inspection costs – they would then be depreciated over a suitable period
I’ve never seen this examined – do you have an exam question in mind?Fill (Dec 2018) b)
remaining carrying amount of previous inspection are to be de-recognised.
It does not say anything about taking through spl just de-recognition?
@unfazed said:
Fill (Dec 2018) b)remaining carrying amount of previous inspection are to be de-recognised.
It does not say anything about taking through spl just de-recognition?
Yes, this is the question which mad eme think where do we recognise the inspection costs.
As we derecognise the previous costs, it reduces PPE and once we recognise the current inspection costs isn’t PPE increased to represent the new increased inspection costs
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