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.
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|Annual period starts
||Effective version of standard
||Notes on amendments|
|On or after 1 January 2023||IAS 16 2021 Issued Standards||Includes amendments 1, 2*, 3* and 4*|
1 January 2022 – 31 December 2022
|IAS 16 2019 Issued Standards
||Includes amendments 1, 2* and 3
|1 January 2019 – 31 December 2021
||IAS 16 2020 Required Standards
||Includes amendments 1 and 3
|1 January 2018 – 31 December 2018
||IAS 16 2018 Required Standards
||Includes amendment 1
* Not UK endorsed as at 21 June 2021. Read more on UK endorsement of IFRS standards. Not EU endorsed as at 21 June 2021. Read more on EU endorsement of IFRS standards.
The 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 2021 Issued Standards.
Full access to details of all the amendments is only available to Financial Reporting Faculty members. Find out how to join the faculty.
The following interpretations refer to IAS 16
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.
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, and
- the requirement to disclose proceeds and cost included in profit or loss from the sale of items produced before an item of property, plant and equipment is in the location and condition necessary for it to be able to operate in the manner intended.
IAS 16 paragraph for which exemption is available: 73(e) (comparative period only), 74A(b).
This page was last updated 21 June 2021