For-profit Entities: Property, Plant and Equipment—Proceeds before Intended Use
These proposals are relevant for Tier 1 and Tier 2 for-profit entities.
The International Accounting Standards Board (IASB) has published for comment ED/2017/4 Property, Plant and Equipment—Proceeds before Intended Use (Proposed amendments to IAS 16).
ED/2017/4 proposes to amend IAS 16 Property, Plant and Equipment. This will prohibit an entity deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Instead, an entity would recognise the proceeds from selling those items, and the costs of producing those items, in profit or loss in accordance with the applicable standards.
We encourage you to read the Exposure Draft and provide your comments on the proposals.
The XRB Board is committed to adopting international standards in the for-profit sector. Generally, once a standard has been issued by the IASB, the NZASB then issues the New Zealand equivalent standard without further consultation. Therefore, this Exposure Draft is your opportunity to comment on the proposed future standard that will be issued in New Zealand.
You can send your comments in an email or letter and these can be formal or informal.
Comments are due to the NZASB by 25 August 2017 and to the IASB by 19 October 2017.