A PDF version of this publication is attached here: Property, plant, equipment and other assets guide (PDF4mb)
PwC is pleased to offer our updated accounting and financial reporting guide for Property, plant, equipment and other assets. Although many view the accounting for property, plant, and equipment to be relatively straightforward, there is limited technical guidance and there can be many areas that require judgment. Some areas, such as construction in process, capitalized software, long-lived assetimpairment, and asset disposals, can be complex. In addition to these areas, this guide addresses a variety of other topics including the accounting for asset acquisitions, asset retirement obligations, environmental obligations,insurance recoveries, and research and development costs and funding arrangements.
This guide summarizes the applicable accounting literature, including relevant references to and excerpts from the FASB’s Accounting Standards Codification (the Codification). It also provides our insights and perspectives, interpretative and application guidance, illustrative examples, and discussion on emerging practice issues.
This guide should be used in combination with a thorough analysis of the relevant facts and circ*mstances, review of the authoritative accounting literature, and appropriate professional and technical advice.
References to US GAAP
Definitions, full paragraphs, and excerpts from the FASB’s Accounting Standards Codification are clearly designated, either within quotes in the regular text or enclosed within a shaded box. In some instances, guidance was cited with minor editorial modification to flow in the context of the PwC Guide. The remaining text is PwC’s original content.
References to other PwC guidance
This guide provides general and specific references to chapters in other PwC guides to assist users in finding other relevant information. References to other guides are indicated by the applicable guide abbreviation followed by the specific section number. The other PwC guides referred to in this guide, including their abbreviations, are:
- Business combinations and noncontrolling interests (BCG)
- Consolidation (CG)
- Derivatives and hedging (DH)
- Equity method investments and joint ventures (EM)
- Fair value measurements (FV)
- Financial statement presentation (FSP)
- Financing transactions (FG)
- Income taxes (TX)
- Leases (LG)
- Revenue from contracts with customers (RR)
- Software costs (SW)
- Transfers and servicing of financial assets (TS)
- Utilities and power companies (UP)
Summary of significant changes
The following is a summary of recent noteworthy revisions madeto the guide. Additional updates may be made to future versions to keep pace with significant developments.
Revisions made in April 2024
Chapter 4: Depreciation and amortization
- PPE 4.2.4A was removed since ASC 842 is now effective for all companies.
Chapter 5:Long-lived asset impairment and assets held for sale
- PPE 5.1.1 and 5.3.1.4 were updated to remove guidance on ASC 840 since ASC 842 is now effective for all companies.
- PPE 5.2.5 was updated to provide additional guidance on accounting for depreciation expense when a company intends to dispose of a long-lived asset before the end of its previously estimated useful life.
- PPE 5.3.3.1 was updated to remove a reference to the Conceptual Framework due to the issuance of ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements.
Revisions made in February 2024
Chapter 1: Capitalization of costs
- PPE 1.4.3.1 was updated to provide additional guidance on accounting for lease-related maintenance deposits.
- PPE 1.4.3 and 1.4.3.1 were updated to remove guidance on ASC 840 since ASC 842 is now effective for all companies.
- PPE1.7 was updated to provide additional guidance on cash flow considerations for real estate projects for sale or rental.
Chapter 2: Asset acquisitions
- PPE2.7 was updated to provide additional guidance on accounting for employee benefits in an asset acquisition and to remove guidance on ASC 840 since ASC 842 is now effective for all companies.
Revisions made in November 2023
Chapter 6: Asset disposals
- PPE 6.4.3A was removed since ASC 842 is now effective for all companies.
- PPE 6.2.2.4, PPE 6.2.4.4, PPE 6.3.1.1, PPE 6.4, PPE 6.4.1, PPE 6.4.3, PPE 6.4.4, and PPE 6.4.5 were updated to remove guidance on ASC 840 since ASC 842 is now effective for all companies.
Copyrights
This publication has been prepared for general informational purposes and does not constitute professional advice on facts and circ*mstances specific to any person or entity. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication. The information contained in this publication was not intended or written to be used, and cannot be used, for purposes of avoiding penalties or sanctions imposed by any government or other regulatory body. PricewaterhouseCoopers LLP, its members, employees, and agents shall not be responsible for any loss sustained by any person or entity that relies on the information contained in this publication. Certain aspects of this publication may besuperseded as new guidance or interpretations emerge. Financial statement preparers and other users of this publication are therefore cautioned to stay abreast of and carefully evaluate subsequent authoritative and interpretative guidance.
The FASB Accounting Standards Codification® material is copyrighted by the Financial Accounting Foundation, 401 Merritt 7, Norwalk, CT 06856, and is reproduced with permission.
