New BDO Comment Letter Amendments to IAS 16 Property, Plant and Equipment – Proceeds before Intended Use
26 October 2017
BDO has submitted its comment letter in response to the International Accounting Standard Board’s exposure draft ED/2017/4 Amendments to IAS 16 Property, Plant and Equipment – Proceeds before Intended Use.
We do not agree with the proposals as drafted, and consider that they would not deal satisfactorily with the current diversity in practice. We believe that the Board should expand and enhance the amendments to provide appropriate guidance for:
- Accounting for the proceeds of sale
- Identifying costs that relate to items produced and sold before an item of property, plant and equipment is available for use
- The point at which an asset is in the location and condition necessary for it to be capable of operating in the manner intended by management.
Without this additional guidance, we are sceptical that the amendments will bring significant improvements to financial reporting.
Please click here to access BDO’s full library of comment letters posted on the BDO Global website.