As these items are usually a significant aspect of the balance sheet of an entity, any potential change in the treatment of these can have large affects on the company.
Primarily, the main focus areas of this standard are three-fold. The first is to specify what can be classified as PP&E. After these criteria have been met, it must be decided at what value they are held at. Finally, this standard addresses the charges against property, plant, and equipment which includes such items as depreciation and impairment.
IAS are principles based standards, rather than strict rules based standards that govern international accounting. IAS standards differ from IFRS standards in that they were introduced prior to 2001, whereas IFRS were produced after this date by the IASB, or the International Accounting Standards Board. When determining the hierarchy of these, the IAS is considered to be the building blocks in which the newer and more relevant IFRS are founded and therefore IFRS is more authoritative when these conflict.
Accounting made easy, for FREE!
Access the contact form and send us your feedback, questions, etc. We are always welcome to help someone out. You can also contact us if you wish to submit your writing, cartoons, jokes, etc. and we will consider posting them to share with the world! The Facebook and LinkedIn groups are also good areas to find people interested in accounting like yourself, don’t hesitate to join as everyone of all levels are welcome to become part of the community.