Property, Plant, and Equipment (Portfolio 5132)
At a glance
I. Background and Scope of Portfolio
II. Initial Recognition and Measurement of Property, Plant and Equipment
III. Subsequent Accounting for Long-Lived Assets Classified as Held and Used
IV. Long-Lived Assets Held for Sale
V. Sale or Disposal of Long-Lived Assets
Abstract
Bloomberg Tax and Accounting Portfolio 5132, Property, Plant and Equipment, discusses the U.S. GAAP and IFRS rules on how to account for property, plant, and equipment (PP&E). It details the rules for what items to capitalize when acquiring or constructing PP&E. Once PP&E is acquired or constructed, it typically is classified as “held and used.” However, when an entity plans to sell or abandon PP&E, it must classify the PP&E as “held for sale” if certain criteria are met.
PP&E that is held and used is depreciated and, if circumstances warrant, is tested for impairment. This Portfolio explains and illustrates the depreciation and impairment testing rules. It also explains and illustrates how PP&E is presented in financial statements and how it is common factored into financial analysis by the investment community.
PP&E that is held for sale is presented at its fair value less estimated cost to sell and is not depreciated. This Portfolio details the criteria for classifying assets as held for sale, as well as special rules for assets that are deemed to be held for sale when they are acquired. It further explains the appropriate accounting when held-for-sale assets are no longer held for sale.
This Portfolio may be cited as Bloomberg Tax and Accounting Portfolio 5132, Daher and Daher, Property, Plant and Equipment (Accounting Policy and Practice Series).