## Scope of AS 10 – What is NOT Covered?
AS 10 applies to PPE, but certain assets are specifically excluded and governed by other standards:
| Asset Type | Applicable Standard |
|---|---|
| Assets taken on lease | AS 19 – Leases |
| Intangible Assets | AS 26 – Intangible Assets |
These assets should be recorded in the books under their respective standards, not AS 10.
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## Recognition Criteria
An item is recognised as PPE only if both conditions are met:
1. Future Economic Benefits — It is probable that future economic benefits associated with the item will flow to the entity (benefit for more than 12 months).
2. Cost can be measured reliably — The cost of the item can be measured reliably.
> If either condition fails, the expenditure is charged to the Profit & Loss account in the period incurred.
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## Measurement Overview
Once recognised, PPE is measured in two stages:
| Stage | Basis |
|---|---|
| Initial Measurement | At Cost |
| Subsequent Measurement | Either Cost Model (carry at cost less accumulated depreciation/impairment) or Revaluation Model (revalue to fair value periodically) |
Under the Cost Model, the asset stays at historical cost less depreciation.
Under the Revaluation Model, the asset is revalued at the end of every period to its fair value.