IFRS® Standards

Property, Plant and Equipment: Proceeds before Intended Use (Amend IAS 16)

Summary

The Accounting Standards Board (AcSB) is participating in the International Accounting Standards Board’s (IASB) project to amend IAS 16 Property, Plant and Equipment.

Staff Contact(s)

Michelle Thomas, CPA, CGA

Principal, Accounting Standards Board

Project Status

  • Information gathering

    Completed prior to October 2016

    The AcSB’s IFRS® Discussion Group had discussions related to this project at several of its meetings (December 2014, May 2016, November 2016)

  • Approving project

    The IASB approved the project in October 2016

  • Consulting stakeholders

    IASB Exposure Draft issued in June 2017

    AcSB Exposure Draft, which corresponds to the IASB Exposure Draft, issued in July 2017

    Public outreach on Exposure Draft from July 2017– October 2017

    The AcSB consulted with its IFRS Discussion Group in October 2017

  • Deliberating feedback

    IASB and AcSB are deliberating comments on their Exposure Drafts

  • Final pronouncement

Meeting & event summaries


News


October 19, 2017

News

AcSB Response – Property, Plant and Equipment—Proceeds before Intended Use (Proposed amendments to IAS 16)

On October 19, 2017, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in June 2017. The letter disagrees with the proposal because it would not provide entities with sufficient guidance to determine the costs related to the selling items produced before an asset is available for use. Several concerns are raised, including how the resulting profit margin may not be a meaningful measure for users to predict future profitability and cash flows. The AcSB strongly encourages the IASB to consider further developing this proposal in order to provide relevant information to users. Read the AcSB letter posted by the IASB.

July 13, 2017

News

AcSB Exposure Draft – Property, Plant and Equipment—Proceeds before Intended Use (Proposed amendments to IAS 16)

July 13, 2017. The AcSB has issued its Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Stakeholders are encouraged to submit their comments by October 19, 2017.

May 15, 2014

News

Final Amendments – Clarification of Acceptable Methods of Depreciation and Amortisation

May 15, 2014. The IASB has issued narrow-scope amendments to IAS 16 Property Plant and Equipment and IAS 38 Intangible Assets to clarify that the use of a revenue-based depreciation and amortization method is not appropriate; however, that presumption is rebuttable for intangible assets. The amendments are effective for annual periods beginning on or after January 1, 2016.

March 22, 2013

News

AcSB Response – Clarification of Acceptable Methods of Depreciation and Amortisation (Proposed amendments to IAS 16 and IAS 38)

On March 22, 2013, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in December 2012. The letter supports the proposed amendments and agrees that there is a limited circumstance in which the use of a revenue-based method that is based on units sold rather than total expected revenue may be appropriate. As well, guidance should not be provided in the Basis for Conclusions. The letter also expresses concern that a reason was not provided as to why an amendment regarding the relevance of information about technical or commercial obsolescence of the product or service output was added. In addition, it queries why this amendment is only applicable to the diminishing balance method. Read the AcSB letter posted by the IASB.

December 20, 2012

News

Exposure Draft – Clarification of Acceptable Methods of Depreciation and Amortization (Proposed amendments to IAS 16 and IAS 38)

December 20, 2012. The AcSB has issued an Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Canadian stakeholders are encouraged to submit their comments, on the form provided, by April 2, 2013.

December 6, 2012

News

December 6, 2012. The IASB has issued an Exposure Draft proposing amendments to IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets. Canadian stakeholders are encouraged to submit their comments to the IASB by April 2, 2013.

Disclaimer

This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.