The Interpretations Committee received a request to clarify the accounting for the net proceeds from selling any items produced while making an item of property, plant and equipment (PPE) available for use. The submitter has asked whether the amount by which the net proceeds received exceed the costs of testing should be recognised in profit or loss or as a deduction from the cost of the PPE.
The Interpretations Committee added this item to its agenda and after analysis of the issue recommended that the Board propose a narrow-scope amendment to IAS 16 to prohibit the deduction of proceeds from selling items produced before an item of PPE is available for use from the cost of that PPE.
The Board tentatively decided to propose amendments to IAS 16.