IASB: Proposals for amendments to IAS 16 and IAS 38 with respect to depreciation and amortisation

04 December 2012

The IASB published for public comment an Exposure Draft of proposed amendments to IAS 16 Property, Plant and Equipment, and IAS 38 Intangible Assets: Clarification of Acceptable Methods of Depreciation and Amortisation. The IASB requests comments on these proposals by 2 April, 2013.

IAS 16 and IAS 38 both establish the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset.  The objective of the proposed amendments is to ensure that preparers do not use revenue-based methods to calculate charges for the depreciation or amortisation of items of property, plant and equipment or intangible assets.  This is because a revenue-based method reflects a pattern of economic benefits being generated from the asset, rather than the expected pattern of consumption of the future economic benefits embodied in the asset.

Press release

Exposure Draft and comment letters

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