The International Accounting Standards Board (IASB) has proposed narrow scope amendments to IAS 16 Property, Plant and Equipment to reduce the diversity in application of the standard
IAS 16 establishes principles for recognising and measuring items of property, plant and equipment as assets.
The proposed amendments would prohibit deducting sales proceeds from the cost of an item of property, plant and equipment while that asset is being made available for use. Instead, the company would recognise those sales proceeds and the costs of producing those items in profit or loss.
The proposed amendments are put forward following discussions of the IFRS Interpretations Committee on accounting for proceeds and costs of testing.
The IASB has not confirmed a planned effective date for the changes as yet.
The 22-page IASB Exposure Draft ED/2017/4 Property, Plant and Equipment - Proceeds before Intended Use (Proposed amendments to IAS 16) is open for comment until 19 October 2017 and is available here.