Yakub02
Banned
Major inspections
A company might only be allowed to operate some assets if those assets are subject to regular major inspections for faults. The cost of such major inspections is recognised in the carrying amount of the asset as a replacement if the recognition criteria are satisfied.
When a major inspection is carried out any remaining carrying amount of the cost of the previous inspection is derecognised.
Measurement after initialrecognition All items of property, plant and equipment in a class can be accounted for using one of two models:
Cost model - Property, plant and equipment is carried at cost less any accumulated depreciation and any accumulated impairment losses.
Revaluation model - Property, plant and equipment is carried at a revalued amount.
This is the fair value at the date of the revaluation less any subsequent accumulated depreciation and any accumulated impairment losses.
The same model should be applied to all assets in the same class. For example, a company’s policy might be to value all its motor vehicles at cost, but to apply the revaluation model to all its land and buildings
Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. Depreciable amount is the cost of an asset, or other amount substituted for cost, less its residual value.
A company might only be allowed to operate some assets if those assets are subject to regular major inspections for faults. The cost of such major inspections is recognised in the carrying amount of the asset as a replacement if the recognition criteria are satisfied.
When a major inspection is carried out any remaining carrying amount of the cost of the previous inspection is derecognised.
Measurement after initialrecognition All items of property, plant and equipment in a class can be accounted for using one of two models:
Cost model - Property, plant and equipment is carried at cost less any accumulated depreciation and any accumulated impairment losses.
Revaluation model - Property, plant and equipment is carried at a revalued amount.
This is the fair value at the date of the revaluation less any subsequent accumulated depreciation and any accumulated impairment losses.
The same model should be applied to all assets in the same class. For example, a company’s policy might be to value all its motor vehicles at cost, but to apply the revaluation model to all its land and buildings
Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. Depreciable amount is the cost of an asset, or other amount substituted for cost, less its residual value.