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IAS 16 Property, Plant and Equipment

IAS 16 Property, Plant and Equipment sets out the requirements for the recognition of the assets, the determination of their carrying amounts, and the depreciation charges and impairment losses in relation to them. Revised December 2003. Effective 1 January 2008.

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*UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.

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  • Property, plant and equipment (PPE) should be recognised initially at cost. 
  • Cost comprises all directly attributable costs in bringing the asset to the location and condition necessary for normal use. 
  • Subsequently, either the cost or revaluation model may be applied. An entity must apply the same measurement model consistently to each class of PPE.
  • Revaluation surpluses are recognised as other comprehensive income and accumulated in equity
  • Items of PPE must be depreciated on a systematic basis over their useful life
  • On disposal, the difference between the carrying amount of the asset and proceeds received is recognised in profit or loss.

Which version of the standard?

'Which version of the standard?' is only available to members of the Financial Reporting Faculty. Please note that to access electronic versions of IFRS through the links in these standard trackers you need to have first logged into eIFRS.

Annual period starts
Effective version of standard
Notes on amendments 
On or after 1 January 2021 IAS 16 2019 Issued Standards 
Includes amendments 1 – 5
1 January 2019 – 31 December 2020
IAS 16 2019 Required Standards
Includes amendments 1 - 4
1 January 2018 – 31 December 2018
IAS 16 2018 Required Standards
Includes amendments 1 - 3
1 January 2016 – 31 December 2017
IAS 16 2017 Required Standards
Includes amendments 1 and 3

Required Standards book for a particular year assumes that there is no early application of issued but not yet effective IFRSs; The Issued Standards book assumes early application of all issued IFRSs.

For the latest version of the standard, and where the amendments are to be adopted early, refer to IAS 16 2019 Issued Standards.

Recent amendments

Full access to details of all the amendments is only available to Financial Reporting Faculty members. Find out how to join the faculty.

*Not EU endorsed as at 2 December 2019. Read more on EU endorsement.

The following interpretations refer to IAS 16

Current proposals

  1. The IASB is engaged in a project to make a narrow-scope amendment to IAS 16 to clarify that where items produced before an item of PPE is available for use, the proceeds of sale may not be deducted from the cost of the PPE. An exposure draft was issued in June 2017.

UK reduced disclosures

UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.

Amendments to the standard

Where an entity applies FRS 101, it is preparing Companies Act accounts rather than IAS accounts. Therefore, in order to achieve compliance with the Companies Act and related Regulations, guidance in IAS 16 allowing the carrying amount of property, plant and equipment to be reduced by government grants is deleted.

Disclosure exemptions

FRS 101 paragraph 8(f) states that a qualifying entity is exempt from the requirement to disclose a reconciliation of the carrying amount of property, plant and equipment at the beginning and end of the comparative period. 

IAS 16 paragraph for which exemption is available: 73(e) (comparative period only).

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This page was last updated 26 March 2019