Property, Plant and Equipment: Proceeds before Intended Use

Background

The amendments related to this project, Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) were published by the IASB in May 2020. These amendments are effective for annual reporting periods beginning on or after 1 January 2022, with early application permitted.

The amendments prohibit an entity from deducting from the cost of property, plant and equipment, any proceeds received 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 recognises the proceeds from selling such items and related cost, in profit or loss.