Document ID: chunk:federal_register_of_legislation:F2023C00192:body:0:p6
Version: federal_register_of_legislation:F2023C00192
Segment Type: other
Provision Reference: 
Character Range: 13522–16362

an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if the recognition criteria are met. The carrying amount of those parts that are replaced is derecognised in accordance with the derecognition provisions of this Standard (see paragraphs 67–72).
14 A condition of continuing to operate an item of property, plant and equipment (for example, an aircraft) may be performing regular major inspections for faults regardless of whether parts of the item are replaced. When each major inspection is performed, its cost is recognised in the carrying amount of the item of property, plant and equipment as a replacement if the recognition criteria are satisfied. Any remaining carrying amount of the cost of the previous inspection (as distinct from physical parts) is derecognised. This occurs regardless of whether the cost of the previous inspection was identified in the transaction in which the item was acquired or constructed. If necessary, the estimated cost of a future similar inspection may be used as an indication of what the cost of the existing inspection component was when the item was acquired or constructed.

Measurement at recognition
15 An item of property, plant and equipment that qualifies for recognition as an asset shall be measured at its cost.
Aus15.1 Notwithstanding paragraph 15, not-for-profit entities shall initially measure the cost of an item of property, plant and equipment at fair value in accordance with AASB 13 Fair Value Measurement where the consideration for the asset is significantly less than fair value principally to enable the entity to further its objectives. AASB 1058 Income of Not-for-Profit Entities addresses the recognition of related amounts.
Aus15.2 [Deleted by the AASB]
Aus15.3 In respect of not-for-profit entities, for the purposes of this Standard, the initial recognition and measurement at fair value of an item of property, plant and equipment in accordance with paragraph Aus15.1 does not constitute a revaluation.  Accordingly, the revaluation requirements in paragraph 31, and the supporting commentary in paragraphs 34 and 35, only apply where an entity elects to revalue an item of property, plant and equipment after its recognition.

Elements of cost
16 The cost of an item of property, plant and equipment comprises:
(a) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.
(b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
(c) the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired