Exposure Draft on Accounting for PP&E Costs Released.An exposure draft of a proposed statement of position, Accounting for Certain Costs and Activities Related to Property, Plant, and Equipment, has been issued by the Accounting Standards Executive Committee. The proposed SOP would provide guidance on accounting for certain costs and activities related to property, plant and equipment (PP&E) in financial statements prepared in conformity with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . A final SOP would be effective for fiscal years beginning after June 15, 2002, though earlier adoption is encouraged. The committee drafted the proposed SOP to address diversity in accounting for expenditures related to PP&E, including improvements, replacements, betterments BETTERMENTS. Improvement's made to an estate. It signifies such improvements as have been made to the estate which render it better than mere repairs. See 2 Fairf. 482; 9 Shepl. 110; 10 Shepl. 192; 13 Ohio, R. 308; 10 Yerg. Verm. 533; 17 Verm. 109. , additions, and repairs and maintenance. The proposed SOP addresses accounting and disclosure issues related to determining which costs related to PP&E should be capitalized versus which should be charged to expense as incurred. The proposed SOP also addresses capitalization of indirect and overhead costs overhead costs see fixed costs. and component accounting for PP&E. Concurrently, the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). has issued an exposure draft of a proposed Statement of Financial Accounting Standards, Accounting in Interim and Annual Financial Statements for Certain Costs and Activities Related to Property, Plant, and Equipment--an Amendment of APB Opinions Accounting Principles Board (APB) Opinions were published by Accounting Principles Board (APB). The board was created by American Institute of Certified Public Accountants (AICPA) in 1959 and was replaced by Financial Accounting Standards Board (FASB) in 1973. Nos. 20 and 28 and FASB Statements Nos. 51 and 67 and a Recission of FASB Statement No. 73. That proposed statement includes amendments to certain FASB pronouncements This article is a list of Financial Accounting Standards Board (FASB) pronouncements, including Statements, Concepts Statements, Interpretations, and Technical Bulletins, which are issued to provide rules and guidelines in preparing, presenting, and reporting financial statements that would be made in conjunction with issuance of a final SOP. Comments on both exposure drafts are due Oct. 15, 2001. To obtain copies of the exposure drafts, visit: www.aicpa.org/members/div/acctstd/edo/index.htm |
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