IAS 16 and componentisation

In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again.

  1. What is the rationale behind componentisation of property,plant and equipment?

  2. What factors determine the identification of the component parts of PPE?

  3. What is the meaning of ‘significant component’ in the context of PPE?

  4. Which of the following assets should also use componentisation where applicable?

  5. The general rule is that there should be retrospective application of IAS 16 and componentisation. Is it possible to apply componentisation prospectively at the date of transition to IFRS?