RSM220H1 Lecture Notes - Lecture 9: Operating Expense, Lump Sum, Book Value
Document Summary
Held for use in production of goods and services, for rental to others, or for administrative purposes. Not intended for sale in ordinary course of business. Probable that item"s associated future benefits will flow to the entity. If cost incurred but recognition criteria are not met, costs are recognized as expense. Degree of componentization is not specified by ifrs/aspe. Only separate if significant portion of total cost. Purchase price net of discounts, plus non-refundable purchase taxes and duties. Expenditures to bring asset to required location and operation. Estimate of costs associated with asset"s eventual disposal. Some costs do not directly increase future economic benefit of an existing item of ppe but are necessary for entity to obtain future economic benefits. Recognition of costs ceases when item is in the location and condition necessary for it to be capable of operating in the manner intended by management. Day to day servicing costs are recognized as profit/loss.
