What costs can I capitalise for a non-current asset under IAS 16?

You can capitalise the purchase price, import duties, and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating, such as installation and site preparation costs.

What is the difference between the cost model and the revaluation model?

The cost model carries an asset at its cost less accumulated depreciation and impairment, while the revaluation model carries it at its fair value at the date of revaluation less subsequent accumulated depreciation and impairment.

How do I account for a revaluation surplus?

A revaluation surplus is credited to Other Comprehensive Income (OCI) and accumulated in equity under the heading 'revaluation surplus'. It is not recognised in profit or loss.

How many hours should I spend on IAS 16?

Instead of tracking total hours, which can be misleading, aim for mastery of specific skills. Spend 2-3 focused sessions of 1-2 hours each on the core calculations (cost, depreciation, revaluation) and one full past paper question. Quality of practice beats quantity of hours.

What if I get the depreciation calculation wrong in the exam?

Examiners often apply an 'own figure' rule. If you use your incorrect depreciation figure consistently in subsequent parts of the question, like calculating the carrying amount, you can still earn the marks for those later parts. The key is showing your method clearly.

Is it better to choose a simple depreciation method in the exam if I'm short on time?

Yes, if the question allows for it. The straight-line method is the quickest and safest to apply, minimising the risk of calculation errors under pressure. Always read the question carefully to see if a specific method is required.

How do I know I'm ready to move on from IAS 16?

You are 'ready' when you can consistently score 70-80% on Section A and B style questions on this topic from your question bank, under timed conditions. It's about successful application, not just passive reading.

FR Financial Reporting

IAS 16 Property, Plant and Equipment (FR)

Master IAS 16 for your ACCA FR exam. This guide covers recognition, measurement, depreciation, and derecognition of PPE, with a worked example to secure marks.