Route 102 – One man’s year-long journey……Day 70

  • By Jeremy Williams
  • 25 June 2015 00:00

To mark this momentous year for UK GAAP, I'm embarking on a mission to work my way through FRS 102, reading a portion on each working day of 2015 and writing a short blog entry on my thoughts and musings (be they few or many).

DAY 70 (25 Jun)

So let's get started on section 17 properly. The section applies to 'true' PPE and to investment properties which cannot be fair valued without incurring undue cost or effort (but then, if you've followed this blog for the past fortnight, you'll be only too aware of this latter point. And if you haven't followed the blog until now, nice to meet you!)

Para 17.2 has a nice straightforward definition: PPE means tangible assets used for production or supply of goods or services or admin (true PPE) or for rental to others (e.g. plant and equipment rented out to customers under operating leases), and we expect to use them for more than one period. 17.3 excludes biological assets, heritage assets and mineral rights and reserves, since these are all covered elsewhere.

Para 17.4 is also pretty obvious. A fixed asset must be an asset, i.e. there must be probable future economic benefits and its cost must be capable of reliable measurement.

Para 17.5 is where things get a little more interesting - as we'll see tomorrow....

P.S. If you missed the last instalment click here

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