## AS 10 – What is PPE?

Property, Plant and Equipment (PPE) are tangible items that satisfy all three of the following conditions:

Condition	Detail
Tangible	Has physical existence
Held for use	In production/supply of goods or services; rental to others; or administrative purposes
Long-term use	Expected to be used for more than one period (i.e., more than 12 months)

> Example: Computers and furniture used by employees of a CA firm qualify as PPE.

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## Bearer Plants

A Bearer Plant is a living plant that:

Is used in the production or supply of agricultural produce
Is expected to bear produce for more than 12 months
Has a remote likelihood of being sold as agricultural produce (except for incidental scrap sales)

Type	Life	Treatment	Example
Bearer Plant	More than 12 months	Covered under AS 10 (like PPE)	Mango Tree
Non-Bearer Plant	Less than 12 months	Treated as Biological Asset under AS 41	—

Biological Assets include animals and non-bearer plants. Agricultural produce grown on bearer plants (e.g., mangoes) is not PPE — it is agricultural produce.

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## Key Distinction

Bearer Plant → AS 10 (PPE treatment)
Biological Animal → AS 41 (Biological Assets)
Agricultural Produce (harvested from bearer plant) → AS 41 / Inventory

Worked example

### Example 1

Example: A mango orchard — the mango trees are Bearer Plants (life > 12 months, used to produce mangoes) → classified under AS 10. The mangoes harvested are agricultural produce → not PPE.

### Example 2

Example: A dairy farm's milch cows → Biological Assets (animals), not PPE under AS 10.

### Example 3

Example: A CA firm's office computers and chairs → PPE under AS 10, since they are tangible, held for administrative use, and used for more than 12 months.

⚠️ Common exam mistakes

Treating all plants/trees as biological assets — Bearer Plants with life > 12 months used for agricultural produce are PPE under AS 10.
Confusing agricultural produce (the output of a bearer plant, e.g., mangoes) with the bearer plant itself — only the plant qualifies as PPE.
Including assets expected to be used for less than 12 months as PPE — the more-than-one-period / 12-month threshold is mandatory.

Bare-Act text Paragraph 6 – Definitions · AS 10 – Property, Plant and Equipment (ICAI) · click to expand

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.

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AS 10 – Definition of Property, Plant and Equipment (PPE) and Bearer Plants

Worked example

⚠️ Common exam mistakes