This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

IASB publishes proposed amendments to IAS 16 regarding proceeds before intended use

  • IASB document (blue) Image

20 Jun 2017

The International Accounting Standards Board (IASB) has published an exposure draft 'Property, Plant and Equipment — Proceeds before Intended Use (Proposed amendments to IAS 16)' on proceeds from selling items produced while bringing an asset into the location and condition necessary for it to be capable of operating in the manner intended by management. Comments are requested by 19 October 2017.

 

Background

The issue was initially raised with the IFRS Interpretations Committee that had origianally intended to develop an interpretation of IAS 16 Property, Plant and Equipment to deal with it. However, during the course of discussions the Committee concluded that a narrow-scope amendment to IAS 16 would be a better solution.

 

Suggested changes

ED/2017/4 Property, Plant and Equipment — Proceeds before Intended Use (Proposed amendments to IAS 16) proposes to amend IAS 16 to prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity would recognise the proceeds from selling such items, and the cost of producing those items, in profit or loss.

 

Effective date

The exposure draft does not contain a proposed effective date which the IASB intends to decide on after the exposure. Nevertheless, the IASB has already concluded that earlier application would be permitted.

 

Additional information

Please click for:

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.