Property, plant and equipment

Property, plant and equipment (PPE) is the balance-sheet caption under IAS 16 for tangible non-current assets used in operations for more than one period, reported at cost less accumulated depreciation.

ByHoang TruongUpdated July 5, 2026

FrameworkIAS 16

See it move

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A waterfall bridges a delivery truck's cost to its carrying amount. The truck cost €50,000, including €2,000 of delivery and registration needed to bring it into use, and is depreciated €5,000 a year on a straight-line basis. After two years, €10,000 of accumulated depreciation has been charged, leaving a carrying amount of €40,000 on the balance sheet.

Where it fits

SubjectFinancial AccountingCoreTopicAsset Measurement & ValuationCore

The formula

LaTeX

\text{Carrying amount} = \text{Cost} - \text{Accumulated depreciation}

Variables

$C$: Cost (purchase price plus directly attributable costs of bringing the asset into use) (€)
$A D$: Accumulated depreciation charged since acquisition (€)

Gives the amount at which property, plant and equipment is reported on the balance sheet at a given date.

Check yourself

PracticeCORE

A manufacturer buys a machine for €120,000 and pays a further €8,000 to have it installed and calibrated before it can be used. The machine is depreciated on a straight-line basis over 8 years with no residual value. What is its carrying amount on the balance sheet after 3 full years of depreciation?

Select an answer to check your understanding.