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Important Stuff on Ind AS 16, Property, Plant and Equipment

Indian Accounting Standard (Ind AS) 16, Property, Plant and Equipment, Important Material

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Ind AS 16: Property, Plant and Equipment

Property, Plant and Equipments are known as fixed assets. These fixed assets are tangible property. These tangible assets are:

  • held for use in production or supply of goods and services, for rental to other , or for administrative purposes
  • expected to be used during more than one period and
  • not held for sale in the normal course of business.


The objective of this Standard is to prescribe the accounting treatment for property, plant and equipment so that users of the financial statements can get information about an entity’s investment in its property, plant and equipment and the changes in such investment.

The principal issues in accounting for property, plant and equipment are the recognition of the assets, the determination of their carrying amounts and the depreciation charges and impairment losses to be recognised.


This Standard prescribes the accounting for Property, Plant and Equipment except when another Ind AS required or permits different accounting treatments.

This Standard does not apply to:
(a) Property, Plant and Equipment classified as held for sale in accordance with Ind AS 105, ‘Non-current Assets held for sale and Discontinued Operation’.
(b) Biological assets relating to agricultural activity under Ind AS 41, ‘Agricultural’.
(c) Mineral rights, mineral reserves and similar non-generative resources.
(d) The recognition and measurement of exploration and evaluation of assets.

However, this Standard does apply to items of property, plant and equipment used to develop or maintain the assets described in (b), (c) and (d) above.


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