Document ID: chunk:federal_register_of_legislation:F2023C00192:body:0:p2
Version: federal_register_of_legislation:F2023C00192
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Character Range: 3046–6209

in bold type state the main principles.  AASB 116 is to be read in the context of other Australian Accounting Standards, including AASB 1048 Interpretation of Standards, which identifies the Australian Accounting Interpretations, and AASB 1057 Application of Australian Accounting Standards.  In the absence of explicit guidance, AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies.

Comparison with IAS 16
AASB 116 Property, Plant and Equipment as amended incorporates IAS 16 Property, Plant and Equipment as issued and amended by the International Accounting Standards Board (IASB).  Australian‑specific paragraphs (which are not included in IAS 16) are identified with the prefix "Aus".  Paragraphs that apply only to not-for-profit entities begin by identifying their limited applicability.

Tier 1
For-profit entities complying with AASB 116 also comply with IAS 16.
Not-for-profit entities' compliance with IAS 16 will depend on whether any "Aus" paragraphs that specifically apply to not-for-profit entities provide additional guidance or contain applicable requirements that are inconsistent with IAS 16.

Tier 2
Entities preparing general purpose financial statements under Australian Accounting Standards – Simplified Disclosures (Tier 2) will not be in compliance with IFRS Standards.
AASB 1053 Application of Tiers of Australian Accounting Standards explains the two tiers of reporting requirements.

Accounting Standard AASB 116

The Australian Accounting Standards Board made Accounting Standard AASB 116 Property, Plant and Equipment under section 334 of the Corporations Act 2001 on 7 August 2015.

This compiled version of AASB 116 applies to annual periods beginning on or after 1 January 2023.  It incorporates relevant amendments contained in other AASB Standards made by the AASB up to and including 15 December 2022 (see Compilation Details).

Accounting Standard AASB 116

Property, Plant and Equipment

Objective
1 The objective of this Standard is to prescribe the accounting treatment for property, plant and equipment so that users of the financial statements can discern information about an entity's investment in its property, plant and equipment and the changes in such investment. The principal issues in accounting for property, plant and equipment are the recognition of the assets, the determination of their carrying amounts and the depreciation charges and impairment losses to be recognised in relation to them.
          AusCF1 AusCF entities are:
               (a) not-for-profit entities; and
               (b) for-profit entities that are not applying the Conceptual Framework for Financial Reporting (as identified in AASB 1048 Interpretation of Standards).
          For AusCF entities, the term 'reporting entity' is defined in AASB 1057 Application of Australian Accounting Standards and Statement of Accounting Concepts SAC 1 Definition of the Reporting Entity also applies. For-profit entities applying the Conceptual Framework for Financial Reporting are set out in paragraph Aus1.1 of the Conceptual Framework.

Scope
2 This