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A PDF version of this publication is attached here: Property, plant, equipment and other assets guide - February 2022 (PDF 4.1mb)
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 asset impairment, 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 circumstances, 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 made to the guide. Additional updates may be made to future versions to keep pace with significant developments.
Revisions made in February 2022
Chapter 5: Long-lived asset impairment and assets held for sale
  • PPE 5.2 was updated to provide additional clarifying guidance on the accounting for a right-of-use asset that is impaired.
  • PPE 5.3 was updated to clarify the guidance on accounting for costs to sell a disposal group.

Revisions made in December 2021
Chapter 7: Capitalized software
  • The guidance formerly in PPE 7 was moved to the new Software costs (SW) guide.

Revisions made in October 2021
Chapter 2: Asset acquisitions
  • PPE 2.1 was updated to include guidance regarding the treatment of a change in interest of a subsidiary that is not a business that does not result in a loss of control.
  • PPE 2.3.1 was updated to provide additional guidance on the measurement elections available when an entity acquires assets through the issuance of equity interests.

Chapter 5: Long-lived asset impairment and assets held for sale
  • PPE 5.3.1.4 was updated to include incremental guidance on assessing the held for sale criteria when there is a planned sale and leaseback transaction under ASC 842, Leases.

Chapter 6: Asset disposals
  • The order of certain sections within PPE 6 was rearranged. Certain sections related to transitioning to ASC 610-20 were also removed.

Chapter 8: Other assets
  • PPE 8.2.1 was updated to include additional clarifying guidance on the recognition of insurance recoverable assets.

Revisions made in May 2021
Chapter 5: Long-lived asset impairment and assets held for sale
  • Figure PPE 5-2 was added to PPE 5.2 to illustrate the model for assessing the impairment of long-lived assets that are held and used.
  • PPE 5.2.1.1 was updated to include guidance for assessing the impairment of assets included within entity-wide asset groups.
  • PPE 5.2.1.2 was added to provide guidance on accounting for changes to asset groups.
  • PPE 5.2.3.1 was added to include considerations when individual assets within a broader asset group experience an impairment indicator.
  • PPE 5.2.4.4 through PPE 5.2.4.15 were updated to include incremental guidance and considerations for specific assets and liabilities included in asset groups (e.g., debt and other long-term obligations, income taxes, and amounts in AOCI).
  • PPE 5.3.1.1 through PPE 5.3.1.7 were updated to include additional guidance when assessing each of the criteria required to be met to qualify for held for sale classification.
  • PPE 5.3.3.2 was updated to include goodwill impairment considerations for scenarios when a disposal group that previously met the definition of a business (i.e., prior to the adoption of ASU 2017-01) no longer meets the definition of a business.
  • PPE 5.3.3.4 was added to include guidance regarding the treatment of amounts included in AOCI when determining the carrying amount of a disposal group that is a foreign entity.
  • PPE 5.3.5 was added to include guidance for newly acquired assets that are classified as held for sale immediately upon acquisition.

Copyrights
This publication has been prepared for general informational purposes and does not constitute professional advice on facts and circumstances 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 be superseded 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.
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