What is property, plant and equipment?



Property, plant and equipment also abbreviated as PPE are tangible item that:

 

  • are held for use in production or supply of goods or services, for rental to others, or for administrative purpose; and
  • are expected to be used during more than one accounting period.
propertyplantandequipment

Items such as spare parts, stand by equipment and servicing equipment are recognized as property, plant and equipment when they meet above definition. If this is not the case then they are recognized as inventory.
Example of property, plant and equipment are buildings, machines and vehicles.

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