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IAS 16 – Contingent pricing of property, plant and equipment


In January 2011, the IFRS Interpretations Committee received a request for guidance on how to account for contingent payments for the separate purchases of property, plant and equipment (PPE) or intangible assets.

Questions that arise include:

  • whether a contingent price in a purchase agreement is an element of the cost of the asset purchased
  • whether subsequent changes in any financial liability represent:
    • the remeasurement of a financial liability that is independent of the asset, and so not adjusted against the carrying amount of the purchased asset, or
    • changes to the cost of the asset that are reflected as increases or decreases to the carrying amount of that asset.


Current status of the project

The Committee ultimately decided that they could not proceed with this issue further until the Board had further finalised its views in the leases and revenue recognition projects.


Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.