IAS 16

The International Accounting Standard 16 (IAS 16) is an accounting standard by the International Accounting Standards Board (IASB). He belongs to the International Accounting Standards and contains rules on accounting for fixed assets.

Scope and approach

IAS 16 prescribes the accounting of fixed assets (property, plant and equipment ) of a company. The assets must be held by the enterprise for the production of products or services, for rental or for administrative purposes. The assets must continue expected to last longer than one year are used.

Excluded from IAS 16 are biological assets ( IAS 41 ), mining and mineral rights ( IFRS 6 ), as well as assets that are held for sale (IFRS 5). The initial valuation of leased assets, which are accounted for by the lessee is regulated in IAS 17. For real estate held as financial investments (so-called investment properties), IAS 40 applies

Assessment

Additions

Carried Additions of an asset in accordance with IAS 16, as in the German Accounting Law, the amount of the purchase price or production cost. The cost includes:

A special feature compared to HGB accounting is in accordance as part of acquisition or production cost, the activation of asset retirement obligations. IAS 16:16 c.

Does not include the acquisition or production costs in accordance with IAS 16.19,:

Regular maintenance and repair costs may not be capitalized in accordance with IAS 16:12.

Subsequent measurement

The impact assessment there is an option to choose between the cost model (continuing acquisition or production costs) and the revaluation model ( revaluation method). In the cost model, the acquisition or production cost must be reduced by the depreciation and / or impairment ( IAS 16.30 ). The revaluation model is valued at fair value less scheduled or non-scheduled depreciation (IAS 16:31 ).

Depreciation and amortization

Amortized cost is determined on the basis of a revaluation at fair value (fair value accounting). The fair value or revaluation approach is only permitted if this value can be measured reliably. Also note that the market value must then be applied to the entire category of assets, ie it is not permissible to put a building with the market value and the other with the amortized acquisition or production cost. The ability to account for fixed assets at their fair value represents an unknown in the German Accounting Law possibility of subsequent measurement dar.

Another focus in IAS 16, the so-called component approach dar. He states that any identifiable part of a fixed asset must be written off with its specific useful life, such as the engines of an aircraft are depreciated with a different useful life than the aircraft itself, if the actual useful lives different.

Versions and validity in the European Union

The currently valid version of IAS 16 dated from 2003 and entered into force on 1 January 2005. This version applies to the European Commission Regulation of 29 December 2004 from 1 January 2005 and in the European Union (see also: International Accounting Standards).