We cannot recognize everything as assets, there should be criteria as such. Para 7 of IAS 16 contains the following recognition criteria for property plant and equipment:
Recognition criteria for property plant and equipment:The cost of an item of property, plant and equipment shall be recognized as an asset if, and only if:
(a) it is probable that future economic benefits associated with the item will flow to the entity; and
(b) the cost of the item can be measured reliably.
What assets constitute property, plant and equipment?
Para 6 of IAS 16 defines property, plant and equipment as follows:
Property, plant and equipment are tangible items that:
(a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
(b) are expected to be used during more than one period.
As per Para 7 of IAS 16 we have to follow recognition criteria for property plant and equipment
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