20. June 2017

IASB publish Draft of an Amendment to IAS 16

Today, the IASB has published the Exposure Draft ED/2017/4 Property, Plant and Equipment- Proceeds before Intende Use use which proposes an amendment to IAS 16 Property, Plant and Equipment. As proposed, net proceeds from selling any items produced while bringing a PPE asset into location and condition of its intended use are no longer deductible from cost of testing (making part of directly attributable cost) of the PPE item.

The reason behind is a lack of clarity in IAS 16.17(e), allowing those proceeds being deducted from cost of testing, but not stating whether proceeds are deductible if (a) they result from activities other than testing and (b) they exceed the costs of testing.

This amendment shall be applied retrospectively. The effective date has not been fixed yet.

The IASB requests comments on the proposals by 19. October 2017 to be submitted electronically (further information IASB project page).