Category Archives: 1.05 Property, Plant and Equipment

revaluation surplus – Property, plant and equipment schedules template

Property, plant and equipment schedules template includes a line named as “Revaluation surplus”. This is not a normal default line in the schedule and is added on rare cases only. How and why is there such a line in the schedule?

First off the line only comes up when revaluation model is used. When normally assets are carried on the balance sheet at cost less accumulated depreciation model, under the revaluation model the assets are carried at a revalued amount, being its fair value at the date of the revaluation less subsequent depreciation and impairment, provided that the fair value can be measured reliably. Don’t make a mistake here, even assets that are revalued, are also depreciated. But that’s not the point we’re trying to make here.
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Subsequent measurement – Property, plant and equipment schedules template

Property, plant and equipment schedules template includes in addition to line “Additions” other changes inside the asset groups. After the initial recognition already discussed in our previous post the asset is carried on the balance sheet and various things can happen to it. It may be disposed, classified as held for sale, depreciated, revalued and impaired. When we’ll cover those changes in more detail in our future posts, what are in fact the key principles one should keep in mind when measuring the assets after the initial recognition?
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Property, plant and equipment schedules template – depreciation

Property, plant and equipment schedules template includes a line named as “Depreciation charge”. You may also have seen “Amortization” and simple “Depreciation” used. The meaning stays the same, so there’s really no difference in terms of which to use, but the questions “What this depreciation is?” still remains. So with this post I’ll try to answer to this very same question.

As mentioned in one of our previous posts about property, plant and equipment, with the initial recognition management gives an estimated useful life to an asset. In addition to useful life certain assets may in the eyes of management have a residual value, which can be collected from disposal of the asset. Usually such residual value is applicable in case of buildings or large machinery in which case the residual value is material to the financial statements. On lot of cases say for an example from disposal of a computer that operates you may collect some proceeds; however estimating them is really inefficient and not always precise. So, we have determined the estimated useful life and say the residual value as well. What happens next?
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Property, plant and equipment schedules template – acquisitions

Property, plant and equipment schedules template includes a line named as “Additions”. The synonym for this word is also “Acquisitions”. You may come across both of them, but just so you’d know, we’ll explain a bit the conditions for recognizing an assets as an addition to PPE and little insight as to how to do it.
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Property, plant and equipment schedules template – what are property, plant and equipment?

Property, plant and equipment schedules template is quite detail and includes a lot of numbers. While we are covering all of them in our future posts, let’s first clear the air around the term itself. What is meant under “property, plant and equipment” (hereinafter called as “PPE”) and what is the general accounting rules surrounding them?
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