| Component accounting is required. An item of PPE is defined by the economic benefits that are derived from it, not the physical nature of the item. |
Significant and separable component parts should be recorded as individual assets where practicable. In practice, this definition has led to less components being reported under ASPE than IFRS. |
| Any revenue and expense incurred prior to the PPE asset being ready to use is taken to profit or loss, as this is considered incidental to the construction of the asset. |
Any revenue or expense from using an item of PPE prior to its substantial completion is included in the asset’s cost. Expenses are added to the asset cost while revenues are deducted from the asset cost. |
| Borrowing costs directly attributable to PPE acquisition, construction, or development must be capitalized. |
Directly attributable Interest costs may be capitalized if this is the company’s chosen accounting policy. |
| The cost of legal and constructive obligations for asset retirement must be capitalized. |
Only legal obligations for asset retirement need to be capitalized. |
| PPE items can be accounted for using the cost or the revaluation models. |
Only the cost model may be used for PPE. |
| Investment properties can be accounted for using the cost or fair value models. |
No separate standard for investment properties. They fall under the same general rule (i.e., the cost model) as other types of PPE. |
| IAS 16.19 (IAS, 2003a) prohibits the inclusion of general overhead costs in the capital cost of a property, plant, and equipment asset. |
S 3061.08 allows directly attributable overhead costs to be included in the capital cost of self-constructed property, plant, and equipment assets. |
| The general capitalization criterion requires the presence of future economic benefits flowing to the entity. However, IAS 16.20 (IAS, 2003a) prohibits the capitalization of redeployment, relocation, or reorganization costs. This excludes the capitalization of some of the items that could be classified as betterments under ASPE. |
S 3061.14 allows for the capitalization of betterments. Betterments are costs incurred to improve the service capacity, extend the useful life, improve the quantity or quality of output, or reduce the operating costs of a property, plant, and equipment asset. |
