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Sample Disclosure – Property, Plant and Equipment (27 November 2008)


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Property, plant and equipment and depreciation

All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Freehold land has an unlimited useful life and therefore is not depreciated. Capital­work-in-progress is not depreciated as these assets are not available for use. Depreciation of other property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life, at the following annual rates:

Buildings 2%

Plant, machinery, mould, die and laboratory equipment 10%

Office equipment, fixtures, fittings, renovations and computers 10% – 20%

Motor vehicles 20%

The residual values, useful life and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in income statement.

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3 Responses to “Sample Disclosure – Property, Plant and Equipment (27 November 2008)”

  • [...] Posted by learnaccounting on December 14, 2008 If you need sample disclosure of accounting policy on property, plant and equipment please refer to:Accounting Policy On Property, Plant And Equipment [...]

  • Samuel on May 2, 2011

    I will like to know more about accounting cuz i study accounting in school

  • Indangasi on January 12, 2013

    i want to know more concepts of accounting as im an accounting student.

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