accordance with IAS 36;

impairment losses reversed in profit or loss in accordance

with IAS 36;

depreciation;

the net exchange differences arising on the translation of

the financial statements from the functional currency into a different presentation currency, including the translation of a foreign operation into the presentation currency of the

reporting entity; and

other changes.

              The financial statements shall also disclose:

the existence and amounts of restrictions on title, and property,

plant and equipment pledged as security for liabilities;

the amount of expenditures recognised in the carrying amount of an item of property, plant and equipment in the course of its

construction;

the amount of contractual commitments for the acquisition of

property, plant and equipment; and

if it is not disclosed separately in the statement of comprehensive income, the amount of compensation from third parties for items of property, plant and equipment that were impaired, lost or given up that is included in profit or loss.

Selection of the depreciation method and estimation of the useful life of assets are matters of judgement. Therefore, disclosure of the methods adopted and the estimated useful lives or depreciation rates provides users of financial statements with information that allows them to review the policies selected by management and enables comparisons to be made with other entities. For

similar reasons, it is necessary to disclose:

         depreciation, whether recognised in profit or loss or as a part of the cost

of other assets, during a period; and

         accumulated depreciation at the end of the period.

              In accordance with IAS 8 an entity discloses the nature and effect of a change in

an accounting estimate that has an effect in the current period or is expected to have an effect in subsequent periods. For property, plant and equipment, such

disclosure may arise from changes in estimates with respect to:

         residual values;

the estimated costs of dismantling, removing or restoring items of

property, plant and equipment;

useful lives; and

depreciation methods.

              If items of property, plant and equipment are stated at revalued amounts,

the following shall be disclosed in addition to the disclosures required by

IFRS 13:

          the effective date of the revaluation;

          whether an independent valuer was involved;

for each revalued class of property, plant and equipment, the

carrying amount that would have been recognised had the assets been

carried under the cost model; and

the revaluation surplus, indicating the change for the period and any restrictions on the distribution of the balance to shareholders.

In accordance with IAS 36 an entity discloses information on impaired property, plant and equipment in addition to the information required by paragraph 73(e)(iv)-(vi).

Users of financial statements may also find the following information relevant

to their needs:

the carrying amount of temporarily idle property, plant and equipment;

the gross carrying amount of any fully depreciated property, plant and

equipment that is still in use;

the carrying amount of property, plant and equipment retired from active use and not classified as held for sale in accordance with IFRS 5;

and

when the cost model is used, the fair value of property, plant and equipment when this is materially different from the carrying amount.

Therefore, entities are encouraged to disclose these amounts.

Transitional provisions

The requirements of paragraphs 24-26 regarding the initial measurement of an item of property, plant and equipment acquired in an exchange of assets transaction shall be applied prospectively only to future transactions.

Paragraph 35 was amended by Annual Improvements to IFRSs 2010-2012 Cycle. An entity shall apply that amendment to all revaluations recognised in annual periods beginning on or after the date of initial application of that amendment and in the immediately preceding annual period. An entity may also present adjusted comparative information for any earlier periods presented, but it is not required to do so. If an entity presents unadjusted comparative information for

any earlier periods, it shall clearly identify the information that has not been adjusted, state that it has been presented on a different basis and explain that basis.

Effective date

An entity shall apply this Standard for annual periods beginning on or after 1 January 2005. Earlier application is encouraged. If an entity applies this Standard for a period beginning before 1 January 2005, it shall disclose that fact.

An entity shall apply the amendments in paragraph 3 for annual periods beginning on or after 1 January 2006. If an entity applies IFRS 6 for an earlier period, those amendments shall be applied for that earlier period.

IAS 1 Presentation of Financial Statements (as revised in 2007) amended the terminology used throughout IFRSs. In addition it amended paragraphs 39, 40 and 73(e)(iv). An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007) for an earlier period, the amendments shall be applied for that earlier period.

IFRS 3 Business Combinations (as revised in 2008) amended paragraph 44. An entity shall apply that amendment for annual periods beginning on or after 1 July 2009. If an entity applies IFRS 3 (revised 2008) for an earlier period, the amendment shall also be applied for that earlier period.

Paragraphs 6 and 69 were amended and paragraph 68A was added by Improvements to IFRSs issued in May 2008. An entity shall apply those

amendments for annual periods beginning on or after 1 January 2009. Earlier application is permitted. If an entity applies the amendments for an earlier period it shall disclose that fact and at the same time apply the related amendments to IAS 7 Statement of Cash Flows.

 

Paragraph 5 was amended by Improvements to IFRSs issued in May 2008. An entity shall apply that amendment prospectively for annual periods beginning on or after 1 January 2009. Earlier application is permitted if an entity also applies the amendments to paragraphs 8, 9, 22, 48, 53, 53A, 53B, 54, 57 and 85B of IAS 40 at the same time. If an entity applies the amendment for an earlier period it shall disclose that fact.

IFRS 13, issued in May 2011, amended the definition of fair value in paragraph 6, amended paragraphs 26, 35 and 77 and deleted paragraphs 32 and 33. An entity shall apply those amendments when it applies IFRS 13.

Annual Improvements 2009-2011 Cycle, issued in May 2012, amended paragraph 8. An entity shall apply that amendment retrospectively in accordance with IAS 8

Accounting Policies, Changes in Accounting Estimates and Errors for annual periods

beginning on or after 1 January 2013. Earlier application is permitted. If an

entity applies that amendment for an earlier period it shall disclose that fact.

Annual Improvements to IFRSs 2010-2012 Cycle, issued in December 2013, amended paragraph 35 and added paragraph 80A. An entity shall apply that amendment

for annual periods beginning on or after 1 July 2014. Earlier application is permitted. If an entity applies that amendment for an earlier period it shall disclose that fact.

Withdrawal of other pronouncements

              This Standard supersedes IAS 16 Property, Plant and Equipment (revised in 1998).

              This Standard supersedes the following Interpretations:

          SIC-6 Costs of Modifying Existing Software;

          SIC-14 Property, Plant and Equipment—Compensation for the Impairment or Loss

of Items; and

          SIC-23 Property, Plant and Equipment—Major Inspection or Overhaul Costs.

 

Appendix

Amendments to other pronouncements

The amendments in this appendix shall be applied for annual periods beginning on or after 1 January 2005. If an entity applies this Standard for an earlier period, these amendments shall be applied for that earlier period.

*****

The amendments contained in this appendix when this Standard was issued in 2003 have been incorporated into the relevant pronouncements published in this volume.

 

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