IAS 16 defines property, plant and equipment as tangible assets held for use in the production or supply of goods and services and expected to be used for more than one period.

• A. True
• B. False
• C. Only for disposal
• D. Only for investment

Answer: (A)

The main idea here is the definition of property, plant and equipment under IAS 16. PPE are tangible assets that are held for use in the production or supply of goods or services and are expected to be used for more than one accounting period. This captures two key features: they have physical form, and they are long-term assets used in the entity’s operations, not assets held for sale in the ordinary course.

The statement is true because it aligns with the purpose of PPE: they support ongoing operations and generate revenue over multiple periods, which is why they are depreciated (except for land, which is not depreciated). Assets held for disposal or sale would fall under other IFRS classifications (like IFRS 5 for assets held for sale) rather than PPE.

Examples include factory buildings, machinery, and equipment used in production. Assets held solely for investment or for sale in the ordinary course do not fit PPE.