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IAS 16 — Property, Plant and Equipment

Effective date:

First effective as Canadian GAAP under Part I for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011 except for subsequent amendments.  Earlier application of Part I was permitted.

Published by the IASB:

December 2003

Included in Part I of CPA Canada Handbook:

January 2010

Overview

IAS 16 Property, Plant and Equipment outlines the accounting treatment for most types of property, plant and equipment. Property, plant and equipment is initially measured at its cost, subsequently measured either using a cost or revaluation model, and depreciated so that its depreciable amount is allocated on a systematic basis over its useful life.

History of IAS 16

The following table shows the history of this standard subsequent to the adoption of IFRS in Canada. 

Date1

Development

Comments

Included in Part I of the CPA Canada Handbook2

January 2010

Part I of the CPA Canada Handbook issued

Effective for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. Earlier application is permitted.

January 2010

May 17, 2012

Amended by Annual Improvements 2009-2011 Cycle (classification of servicing equipment)

 

Paragraph 8 has been amended to clarify the classification requirement for servicing equipment.

The amendment is effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted.

August 2012

December 12, 2013

Amended by Annual Improvements to IFRSs 2010–2012 Cycle (proportionate restatement of accumulated depreciation under the revaluation method)

The amendments clarify the requirements for the revaluation model regarding the proportionate restatement of accumulated depreciation.

The amendments generally apply for annual periods beginning, or transactions occurring, on or after July 1, 2014, with earlier application permitted on an individual item basis.

March 2014

May 12, 2014

Amended by Clarification of Acceptable Methods of Depreciation and Amortization (Amendments to IAS 16 and IAS 38)

 

IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets have been revised to incorporate amendments issued by the IASB in May 2014. The amendments to IAS 16 clarify that the use of revenue-based methods to determine the depreciation of an asset is not appropriate. The amendments to IAS 38 clarify that an amortization method based on revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset. However, the amendments provide limited circumstances when a revenue-based method can be an appropriate basis for amortization.

The amendments are effective for annual periods beginning on or after January 1, 2016. Earlier application is permitted.

July 2014

June 30, 2014

Amended by Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41)

 

IAS 16 Property, Plant and Equipment and IAS 41 Agriculture have been revised to incorporate amendments issued by the IASB in June 2014. The amendments include bearer plants within the scope of IAS 16 instead of IAS 41 and also add a definition of bearer plant. Produce growing on bearer plants remains within the scope of IAS 41.

The amendments are effective for annual periods beginning on or after January 1, 2016. Earlier application is permitted.

September 2014

Notes

  1. For further details of relevant developments prior to this, please refer to our Deloitte Global section.
  2. Newly issued, amended or revised IFRSs are part of Canadian GAAP only after they are approved by the Accounting Standards Board in accordance with its due process.

The above summary does not include details of consequential amendments made as the result of other projects.

Related Interpretations

Related IFRIC Agenda Rejection Notices

The rejection notices are available in our Deloitte Global section.

  • IAS 16, IAS 38 and IAS 17 — Purchase of a right to use land (September 2012)
  • IAS 16 — Cost of testing (July 2011)
  • IAS 38 — Amortization method (January 2010)
  • IAS 16 — Disclosure of idle assets and construction in progress (May 2009)
  • IAS 16 — Sale of assets held for rental (May 2007)
  • IAS 16 — Revaluation of investment properties under construction (November 2006)
  • IAS 16 — Property, Plant and Equipment and IAS 17 Leases: Depreciation of assets leased under operating leases (November 2004)
  • IAS 16 — Property, Plant and Equipment (May 2004)

AcSB’s IFRS Discussion Group meetings

  • May 30, 2017 - IFRS 9, IFRS 15 and IAS 16: Seller’s Right to Variable Consideration in an Asset Sale
  • November 29, 2016 - IAS 16: Capitalization of Costs
  • September 13, 2016 - IAS 16: Capitalization of Costs and IAS 16: Accounting for Proceeds and Costs of Testing on Property, Plant and Equipment
  • May 31, 2016 - IAS 16: Capitalization of Costs
  • May 31, 2016 - IFRS 3, IAS 16 and IAS 37: Contingent Consideration in an Asset Purchase
  • December 3, 2015 - IAS 16 and IAS 38: Variable Payments for Asset Purchases
  • September 10, 2015 - IFRS 3, IAS 16 and IAS 37: Contingent Consideration in an Asset Purchase
  • May 14, 2015 - IAS 16: Capitalization of Costs
  • May 14, 2015 - IAS 16: Accounting for Proceeds and Costs of Testing on Property, Plant and Equipment
  • December 9, 2014 - IFRS 3, IFRS 6, IFRS 10 and IAS 16: Acquisition of an Entity Holding a Single Asset
  • December 9, 2014 - IAS 16: Capitalization of Costs
  • December 9, 2014 - IAS 16 and IAS 38: Revenue-based Amortization
  • December 9, 2014 - IAS 16: Depreciation of Spare Parts, Stand-by Equipment and Servicing Equipment
  • December 9, 2014 - IAS 16: Accounting for Proceeds and Costs of Testing on Property, Plant and Equipment
  • September 11, 2014 - IFRS 3, IAS 16 and IAS 37: Contingent Consideration in an Asset Purchase
  • September 11, 2014 - IAS 16: Accounting for Proceeds and Costs of Testing on Property, Plant and Equipment

Amendments under consideration

Correction list for hyphenation

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