ACCA Financial Reporting (F7) Practice Exam 2025 – Complete Prep Guide

The standard that governs Property, Plant, and Equipment is IAS 16. This International Accounting Standard specifically outlines the accounting treatments related to tangible fixed assets, including their recognition, measurement, and depreciation. IAS 16 provides guidance on how to account for the acquisition, use, and disposal of physical assets, specifying criteria for initial recognition, subsequent measurement, impairment, and derecognition of these assets.

In contrast, IAS 38 deals with intangible assets, which cover non-physical resources that cannot be touched but may provide economic benefits, such as patents and trademarks. IAS 10 is related to events after the reporting period and does not concern itself with asset management or characteristics. IFRS 16 addresses leases and focuses on the lessee's and lessor's accounting treatment for lease contracts, which is separate from the specific asset classification of Property, Plant, and Equipment.

Thus, IAS 16 is the appropriate standard for understanding and applying the accounting principles for Property, Plant, and Equipment.