Definitions

6

The following terms are used in this Standard with the meanings specified:

6[1]

A bearer plant is a living plant that:

(a)            is used in the production or supply of agricultural produce;

(b)            is expected to bear produce for more than one period; and

(c)             has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales.

(Paragraphs 5A–5B of AASB 141 elaborate on this definition of a bearer plant.)

6[2]

Carrying amount is the amount at which an asset is recognised after deducting any accumulated depreciation and accumulated impairment losses.

6[3]

Cost is the amount of cash or cash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when initially recognised in accordance with the specific requirements of other Australian Accounting Standards, eg AASB 2 Share-based Payment.

6[4]

Depreciable amount is the cost of an asset, or other amount substituted for cost, less its residual value.

6[5]

Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life.

6[6]

Entity-specific value is the present value of the cash flows an entity expects to arise from the continuing use of an asset and from its disposal at the end of its useful life or expects to incur when settling a liability.

6[7]

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. (See AASB 13 Fair Value Measurement.)

6[8]

An impairment loss is the amount by which the carrying amount of an asset exceeds its recoverable amount.

6[9]

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.

6[10]

Recoverable amount is the higher of an asset’s fair value less costs of disposal and its value in use.

6[11]

The residual value of an asset is the estimated amount that an entity would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

6[12]

Useful life is:

(a)            the period over which an asset is expected to be available for use by an entity; or

(b)            the number of production or similar units expected to be obtained from the asset by an entity.