Question

Summarise disclosures requirements in AASB 116 PPE in your own words. Consider the measurement bases applied, depreciation methods used, estimation of useful life or depreciate rate, the movement of carrying amounts of PPE, cost model or revaluation model, and treatments of revaluation, etc.

Answer 1

An item of property, plant and equipment that qualifies for recognition as an asset shall be measured at its cost.

Depreciation method is simply HOW, IN WHAT MANNER you are going to depreciate. An entity may select from variety of depreciation methods, such as straight-line method, diminishing balance method and the units of production methods.

Useful life is the period over which an asset is expected to be available for use by an entity; or the number of production or similar units expected to be obtained from the asset by an entity.

Cost model: An entity shall carry an asset at its cost less any accumulated depreciation and any accumulated impairment losses.

Revaluation model:An entity shall carry an asset at a revalued amount. Revalued amount is its fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

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