PPE - Definition, Scope, Recognition

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4 Terms

1
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PPE are tangible assets that are:

  1. held for use in the production or supply of goods and services

  2. for rental to others

  3. for administrative use

~ that are expected to be used for more than 1 year


2
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Characterisitics of PPE

  • Tangibility/ physical form

  • use in business

  • long-term in nature


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Scope: The following are excluded

  1. PPE held for sale [PAS 2/ PFRS 5: NCA held for sale]

  2. Biological assets, excp. bearer plants [PAS 41]

  3. Exploration and Evaluation assets [PFRS 6: Mineral Resources]

  4. Mineral Reserves and Mineral Rights [PFRS 6/ PAS 38: Mineral Rights]


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Recognition

  1. Probable

  2. Measurable

  • Spare parts & Stand by equipment

    • GR: Inventory/Prepaid supplies

    • XPN: PPE if: Major spare parts & Long-lived stand by equipment

  • Environmental and Safety Equipment - PPE (e.g. water sprinkler, fire alarm)