The International Accounting Standards Board has issued amendments to IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets.
The amendments are effective for annual periods beginning on or after 1 January 2016, with early application permitted.
It has stated that the principle for the basis of depreciation and amortisation is the expected pattern of consumption of the future economic benefits of an asset and has clarified that the use of “revenue-based methods to calculate the depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset.”