IAS 16 Property, Plant and Equipment

Date recorded:


The Committee considered a potential issue as to whether the production method of depreciation could be used under IAS 16 Property, Plant and Equipment if an asset is not consumed (worn down) directly in relation to the level of use.   For example, if a road with a greater capacity than current demands is built, should depreciation in the initial period be lower than in later periods, if usage is expected to increase over the life of the asset?


Decision not to add

May 2004



The IFRIC agreed that this was foremost a conceptual area, and decided not to add it to the IFRIC agenda.  However, the IFRIC recommended that this topic be considered by the Board as part of the Concepts project.


IFRIC reference: IAS 16

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