CMA Final · Corporate Financial Reporting · Property, Plant and Equipment (Ind AS 16)
Which of the following items qualifies as property, plant and equipment under the Ind AS 16 definition?
A tangible machine held for production and expected to be used over several years qualifies as PPE. Ind AS 16 requires tangible items held for production, supply, rental or administrative use that are expected to be used during more than one period.
- AA tangible machine held for use in production and expected to be used over several yearsCorrect
- BFinished goods held for sale in the ordinary course of business
- CA tangible item expected to be used for less than one period
- DA machine acquired solely for resale to customers
Explanation
PPE are tangible items held for production, supply of goods or services, rental to others or administrative purposes, and expected to be used during more than one period. Only the first option meets both conditions. The others are inventory or short-lived items.
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