BIM31060 | Tax and accountancy: Property, plant and equipment

This guidance refers to FRS 102 Section 17 Property, Plant and Equipment.

Related standards under other frameworks are:

FRS 105 Section 12 Property, Plant and Equipment

IAS: IAS 16 Property, Plant and Equipment

Old UK GAAP: FRS 15 Tangible Fixed Assets

FRS 15 Tangible Fixed Assets does not differ significantly from FRS 102 Section 17, except in respect of renewals accounting which is explained at BIM31065.

FRS 102 Section 17 sets out the principles for the recognition and measurement of property, plant and equipment. It describes the items that should be included in the cost of an item of property, plant and equipment, including the circumstances in which subsequent expenditure should be added to the carrying amount of the asset.

These principles do not correspond with the capital/revenue distinction for tax purposes. For tax purposes it is necessary to ascertain the nature of the expenditure and then, for allowable revenue deductions, to follow the timing of recognition shown in the accounts.