08-18-2009, 04:57 AM
Bilal,
Thanks for using actual words of IAS 16.
Normally "asset available for use" is considred a term that can be affected internally for desired accounting treatment, specially when, the finalization of internally constructed qualifying assets has to be certified by entity's own engineers. That's why I used the words "put into use". To me it stands for "asset available for use" since when it is put into use for commercial reasons it is proved that it was available for use.
Otherwise what you wrote is 100 percent correct.
As far as issue of building is concerned, the entity is not following correct treatment. If building is not used but leased, entity should decide some rental, put it into some agreement, derecognise the building from PPE and recognise it as Investment Property under IAS 40.
As said earlier, under IAS 40 it can be stated under cost model or fair value model.
Regards,
Kamran.
Thanks for using actual words of IAS 16.
Normally "asset available for use" is considred a term that can be affected internally for desired accounting treatment, specially when, the finalization of internally constructed qualifying assets has to be certified by entity's own engineers. That's why I used the words "put into use". To me it stands for "asset available for use" since when it is put into use for commercial reasons it is proved that it was available for use.
Otherwise what you wrote is 100 percent correct.
As far as issue of building is concerned, the entity is not following correct treatment. If building is not used but leased, entity should decide some rental, put it into some agreement, derecognise the building from PPE and recognise it as Investment Property under IAS 40.
As said earlier, under IAS 40 it can be stated under cost model or fair value model.
Regards,
Kamran.
