This treatment is called Component Accounting..

Hi..

can anyone  please define term " significant" used in  IAS-16 PPE..?

dhiraj significant mean.. that part of assets without that assets is not useful

hi, can anyone resolve my doubt in IAS 16.

elements of costs include: the initial estimate of the costs of dismantling, removing the item n restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item during a particular period for purpose other than to produce inventories durin that period.

doubt is underline.

if nature of assets will be inventory .. it will not included in IAS 16

Hi amit..

thks for repliyng. but i am unable to get.

Answer to shilpi's query:

"The obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period."

During that period mentioned in this clause has referance to the period when the machinery is under trial/test runs. It means that elements of costs apart from the other elements mentioned in clause (a) and (b) of para 16 of IAS 16 will also include other expenses incurred specific to the machinery purchased during the periods of trial/test runs which an entity had to incur before starting the actual production of goods meant for sale ( for purpose other than to produce inventories).

As regards the implementation of IAS 16 is concerned, it poses significant challenge for the companies who will be adopting the IFRS for the first time.

IFRS 1 lays down the guidelines/principles for first time adopters of IFRS. Generally, all the standards are to be applied with retrospective effect. But IFRS 1 grants limited exemptions from certain requirements in specified areas where the cost of complying with them would be likely to exceed the benefits to users of financial statements.

The IFRS also prohibits retrospective application of IFRSs in some areas, particularly where retrospective application would require judgments by management about past conditions after the outcome of a particular transaction is already known.

Accordingly para 13 of IFRS lists down certain areas for which first time adopters are given exemptions for application of some standards.

Unfortunately the list of exemption does not include the  exemption from application of IAS 16. The application of IAS 16 will also require high levels of judgements by management about the past conditions because machineries would already be in use or in some cases may be approaching the end of their useful lives. To apply retroactively IAS 16 in such cases will create practical difficulty for the companies. It is going to be huge time consuming process for the capital intensive companies to do the component accounting as per IAS 16 with retrospective effect.

Therefore, it is recommended to apply the IFRS 1 with certain modifications so that India Inc does not face much difficulty in its convergence process to IFRS.

thnks Varun.

now i able to get d pt.

thanks

helo

can anybody tell me what are the challenges and difficulties arised in implementation of ifrs ??

n

tell me the website or source from where i got  information related to ifrs.

there are n number of difficulties.. in terms of ppe.. we need to adopt component accounting.. for that we need to segregate all our assets from buyers point of view