From The Year Beginning On Or After 1 January 2006 Essay

п»їFrom the year starting on or right after 1 January 2005, all companies in Hong Kong and Europe setting up their economical statements in accordance with IFRSs or HKFRSs (equivalent to IFRSs substantially) are required to apply IAS 16 or HKAS 18 Property, Plant and Gear. CLP Cooperation Limited and Nokia Company are two of the companies making use of IAS 16 or HKAS 16 as 2005. CLP holdings Limited stated the following accounting plan for its set assets in its annual statement of 2006 (pages 143and 144). Set assets will be stated by cost less accumulated depreciation and accumulated impairment losses.

Key renewals and improvements that will result in foreseeable future economic rewards, in excess of the originally assessed standard of performance with the existing assets, are capitalized, while protection and repair costs are charged to the profit and loss consideration in the year through which they are received.

Additions symbolize new or perhaps replacement of particular components of an asset. An asset's carrying volume is written down instantly to it is recoverable quantity if the asset's carrying sum is higher than its predicted recoverable amount.

Nokia Corporation mentioned the following in its accounting insurance plan for repairs and protection in its annual report of 2007 (From 20-F site F-13):

Maintenance, repairs and renewals are often charged to expense during the financial period in which they can be incurred. Nevertheless , major renovations are capitalized and within the carrying volume of the asset when it is probable that long term economic rewards in excess of the originally assessed standard of performance of the existing advantage will flow to the group. Major refurbishments are lowered over the outstanding useful life of the related asset. Leasehold improvements happen to be depreciated in the shorter in the lease term or beneficial life. Depending on IAS 16 (or HKAS 16), evaluate the above accounting policies

Internal Control and Accounting Systems Article