At the time of initial recognition, a property, plant and equipment asset will be measured based on its cost: True.
Tangible assets such as property, plant and equipment are assets that are owned by a business firm and are used for the production or supply of its products and services.
In Business management, an asset would only be included in property, plant, and equipment, if it has the following features;
- It is expected or required to be held for use but not for sale.
- It is owned by the business firm.
- It must be tangible and permanent in nature.
- It must have an expected life of a normal operating cycle that is typically above a year.
At the time of initial recognition, a property, plant and equipment asset will be measured based on its cost, which is typically the cash-equivalent price or financial value on the recognition date according to generally accepted accounting principles (GAAP).
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