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  • ED 2017/4 Property, Plant and Equipment – Proceeds before Intended Use

ED 2017/4 Property, Plant and Equipment – Proceeds before Intended Use

03 July 2017

The International Accounting Standards Board (IASB) has published an Exposure Draft (ED 2017/4) proposing amendments to IAS 16 Property Plant and Equipment.

The amendments would prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management.  Instead, an entity would recognise those sales proceeds in profit or loss.

The ED does not propose an effective date.  However, it is proposed that the amendment would only apply retrospectively to items of property, plant and equipment brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the financial statements in which an entity first applies the amendments.

Comments on the ED are requested by 19 October 2017, copies of which can be downloaded from the IASB’s web site here.