IAS16-IAS36 Property, Plant and Equipment [PP&E] Revaluation and Impairment
The objective of this learning and teaching application is to supplement textbooks' coverage of accounting for revaluation increases and decreases, impairment losses, and impairment loss reversals in accordance with IAS 16 [Property, Plant and Equipment] and IAS 36 [Impairment of Assets]. This application encourages independent active learning by enabling users to interactively create and review a diversity of problem-scenarios and automatically generated annotated solutions. Your feedback regarding the application will be used to improve it for future users and should be sent to:
This application examines a fictitious entity's use of IAS 16's Revaluation Model and IAS 36 to account for machinery acquired for its automated manufacturing facilities and that is revalued at the end of its third and sixth years: the machinery suffers an impairment loss at the end of its seventh year and undergoes an impairment loss reversal at the end of the ninth year before being sold at the end of its eleventh year. At each of these revaluation and impairment events the machinery's residual value is re-estimated. For the sake of simplicity this application assumes that the machinery's estimated useful life and depreciation method do not change between the machinery's acquisition and sale. [Note that IAS 16.51 and IAS 16.61 do require PP&E's residual value, remaining useful life, and depreciation method to be reviewed at least at each financial year-end].
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