IAS 16 PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment are tangible items that meet both of the following criteria (IAS 16.6):
Typical examples of property, plant, and equipment are buildings used in the production of goods or for administrative purposes.
IAS 16 does not apply, for example, to property, plant, and equipment classified as “held for sale” in accordance with IFRS 5 (IAS 16.3), and IAS 40 contains specific requirements for investment property.
The cost of an item of property, plant, and equipment is recognized as an asset if both of the following conditions are met (recognition principle) (IAS 16.7):
Whether these criteria are met for the initial and subsequent costs of a particular item of property, plant, and equipment is a question of recognition. All property, plant, and equipment costs are assessed according to the recognition principle at the time they are incurred (IAS 16.7 and 16.10).
Subsequent costs incurred in order to add to, replace part of, or service an item of property, plant, and equipment are generally recognized in the carrying amount of the item if they increase the economic benefits ...