Property, Plant and Equipment Amendments Quiz

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Questions and Answers

When should an entity disclose if it applies an amendment for an earlier period?

When it applies those amendments for an earlier period (correct)

When it applies that amendment prospectively

When it applies IFRS 15

When it applies those amendments retrospectively

What is required if an entity applies the amendments related to bearer plants for an earlier period?

It should apply those amendments retrospectively (correct)

It should not apply the amendments

It should apply those amendments prospectively

It should not disclose that fact

When should an entity apply the amendments of IFRS 16 according to the text?

For annual periods beginning on or after 1 January 2018

For annual periods beginning on or after 1 January 2016

When it applies IFRS 15 (correct)

Only if it chooses to do so

What is the subsequent measurement requirement for entities related to IFRS 17?

Amendments are allowed but need retrospective application Signup and view all the answers

What should an entity disclose if it applies an amendment for an earlier period?

The fact that it applied the amendment for an earlier period Signup and view all the answers

What is the scope of the amendment related to bearer plants as per the text?

Amended paragraphs 3, 6, and added paragraphs 22A and 80B–80C Signup and view all the answers

What did the Board issue in May 2020 related to Property, Plant and Equipment?

Prohibition of deducting amounts received from selling items produced while preparing assets for intended use Signup and view all the answers

Which of the following Standards made minor consequential amendments to IAS 16?

IFRS 13 Fair Value Measurement (issued May 2011) Signup and view all the answers

What is the impact of the May 2020 amendment on recognizing sales proceeds from items produced while preparing assets for use?

Recognize such sales proceeds in profit or loss Signup and view all the answers

Which amendment introduced subsequent measurement requirements related to IFRS 17?

Annual Improvements to IFRSs 2010–2012 Cycle (issued December 2013) Signup and view all the answers

What do the amendments in May 2020 prohibit concerning proceeds of items sold before asset use?

Deducting proceeds from the cost of property, plant, and equipment Signup and view all the answers

When should an entity apply the amendments made in IFRS 17 related to Property, Plant and Equipment—Proceeds before Intended Use issued in May 2020?

For annual reporting periods beginning after 1 January 2022 Signup and view all the answers

Which pronouncement does IAS 16 withdraw according to the text?

IAS 16 Property, Plant and Equipment (revised in 1998) Signup and view all the answers

What is the scope amendment related to bearer plants concerning?

Recognition and measurement of bearer plants in financial statements Signup and view all the answers

When can an entity apply amendments in IAS 16 Appendix Amendments to other pronouncements from the year 2005?

For annual periods beginning on or after 1 January 2005 Signup and view all the answers

What does the revised IAS 16 in 2003 do?

Prohibits the revenue-based depreciation method Signup and view all the answers

What is the effect of applying amendments related to IFRS 17 on subsequent measurement requirements?

Does not affect subsequent measurement requirements Signup and view all the answers

Study Notes

Amendments to IAS 16

In May 2020, the Board issued Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16), prohibiting companies from deducting amounts received from selling items produced while preparing an asset for its intended use from the asset's cost.

Consequential Amendments

IFRS 13 Fair Value Measurement (issued May 2011) made minor consequential amendments to IAS 16.
Annual Improvements to IFRSs 2009–2011 Cycle (issued May 2012) made minor consequential amendments to IAS 16.
Annual Improvements to IFRSs 2010–2012 Cycle (issued December 2013) made minor consequential amendments to IAS 16.
IFRS 15 Revenue from Contracts with Customers (issued May 2014) made minor consequential amendments to IAS 16.
IFRS 16 Leases (issued January 2016) made minor consequential amendments to IAS 16.
Amendments to References to the Conceptual Framework in IFRS Standards (issued March 2018) made minor consequential amendments to IAS 16.

Clarification of Acceptable Methods of Depreciation and Amortisation

The amendment, issued in May 2014, amended paragraph 56 and added paragraph 62A to IAS 16 and IAS 38.
The amendment shall be applied prospectively for annual periods beginning on or after 1 January 2016.

IFRS 15 Revenue from Contracts with Customers

IFRS 15, issued in May 2014, amended paragraphs 68A, 69, and 72 of IAS 16.
The amendment shall be applied when IFRS 15 is applied.

Agriculture: Bearer Plants

The amendment, issued in June 2014, amended paragraphs 3, 6, and 37, and added paragraphs 22A and 80B–80C to IAS 16 and IAS 41.
The amendment shall be applied for annual periods beginning on or after 1 January 2016.

IFRS 16

IFRS 16, issued in January 2016, deleted paragraphs 4 and 27, and amended paragraphs 5, 10, 44, and 68–69 of IAS 16.
The amendment shall be applied when IFRS 16 is applied.

IFRS 17

IFRS 17, issued in May 2017, added paragraphs 29A and 29B to IAS 16.
The amendment shall be applied when IFRS 17 is applied.

Property, Plant and Equipment—Proceeds before Intended Use

The amendment, issued in May 2020, amended paragraphs 17 and 74, and added paragraphs 20A, 74A, and 80D to IAS 16.
The amendment shall be applied for annual reporting periods beginning on or after 1 January 2022.

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Description

Test your knowledge on the amendments made to IAS 16 regarding the treatment of sales proceeds received before the intended use of property, plant, and equipment. Explore how other standards have made minor consequential amendments to IAS 16 as well.