A Proposed Interpretation of IAS 16 Property, Plant and Equipment.

Draft Interpretations are proposals that are not yet final.

Final Status: At its meeting in February 2001, following its review of the comments, SIC approved a final Interpretation without any substantive changes to the proposed consensus, subject to approval by the IASB. A final Interpretation was submitted to the IASB for approval. However, at its April 2001 meeting, IASB did not approve the proposed Interpretation, concluding that the issue should, instead, be addressed in the Improvements Project. Consequently, the SIC did not pursue a final Interpretation.

Summary of SIC D26

D26 addresses the treatment of results from operations, when the income recognition criteria have been met, that are incidental to the construction or development of property, plant and equipment. For example, income may be earned from a building site that is used as a parking lot until construction commences. D26 proposes that the results of incidental operations should be recognised in the net profit or loss for the period. They should not be recognised as an adjustment of the cost of the related property, plant, or equipment asset.

Issued for public comment on 27 September 2000. Comment deadline was 30 November 2000.

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