Exam 9: Property, Plant and Equipment

Costs of training staff in the use of a new asset are capitalised into the initial cost of the asset under AASB 116 Property,Plant and Equipment.

The expected physical wear and tear on an asset should be taken into account when determining the useful life of the asset.

On initial recognition of property,plant and equipment,the cost only comprises the purchase price plus an initial estimate of dismantling and/or restoration costs.

Fair value is defined in AASB 116 Property,Plant and Equipment as the amount for which an asset can be exchanged between knowledgeable willing parties in an arm's length transaction.

Estimated future restoration costs associated with mining land are:

When using the revaluation model:

Depreciation is not recognised if an asset's residual value exceeds its carrying amount.