Question:

Recently, the International Accounting Standards Board (IASB) has issued a new version of Property, Plant and EquipmentProceeds before Intended Use, which made amendments to IAS 16 (AASB 116)Property, Plant and Equipment. These amendments were finalised after consulting a range of stakeholders. The IASB's (2018) staff paper "AP12B: Property, Plantand Equipment: Proceeds before Intended Use (Amendments to IAS 16) - FeedbackAnalysis" provides an overview of stakeholder feedback and staffanalysis.

The However, a group of investors have approached the IASB expressing their concern over these amendments and have asked the board to review its decision because of the implications these have on extractive and petrochemical industries. In response, the IASB has formed a consultancy group comprising accounting professional bodies and accounting firms to gather expert feedback and opinion on the proposed amendments toParagraph 17 of IAS 16.The accounting firm for which you work (this is just pretend, most students are not currently working for an accounting firm, use your imagination to make up a name and letterhead for your accounting firm) has also received an invitation to join the IASB's consultancy group and comment on the proposed amendments to IAS 16 Paragrph17.

Your accounting firm has asked you to undertake rigorous research to explain the issues raised in the IASB's (2019) staff paper "AP12A: Property, Plant and Equipment: Proceedsbefore Intended Use (Amendments to IAS 16) - Transition, Effective date and Due process" and advise whether or not your firm should support the proposed amendments to IAS 16 Pargph 17.

Important note:Although the above IASB's (2019) staff paper covers various aspects of the standard amendment process, the scope of this assessment is limited to Summary of the amendments (paragraphs 5-7) and Transition issues for entities that are already applying IFRS Standards (paragraphs 8-15).

Memo

Present a memo to your colleagues at the accounting firm providing critical analysis of the current requirements and proposed amendments to the accounting standard. Your memo shouldinclude:

(a)Explain in what ways these proposed amendments to IAS 16 Pargraph 17 will change the accounting for such sale proceeds before an asset's intendeduse.

(b)Critical analysis of the current requirements of IAS 16 Paragrph17.

Note: Your critical analysis should include relative merits and demerits of continuing with the existing requirements of IAS 16 Paragrph 17. Therefore, you need provide both for and against evidence-based arguments.

(c)Critical analysis of the proposed amendments to IAS 16 paragrph17?

Note: Your critical analysis should include relative merits and demerits of introducing proposed amendments to IAS 16 paragrph 17. Therefore, you need provide both for and against evidence-based arguments.

(d)Advice on whether or not your accounting form should support the proposed amendments to IAS 16 Paragrph17.

Note: This advice should be supported with a well-justified logical argument based on the critical analysis of the current requirements and proposed amendments to IAS 16 Paragrph 17.

Resources:

AASB 116 - Property, Plant and Equipment

www.ifrs.org> Projects > Completed projects > Completed research, maintenance and other projects >Property, Plant and Equipment: Proceeds before Intended Use(Amendments to IAS16).

You must use the key sources(i.e.IASB 2018 and 2019 staff papers) to develop yourarguments.

Look at all tabs but in particular the "Project History" and "Consultation Feedback" tabs in www.irfrs.org link to develop your arguments. Refer to at least onecomment letterwhen addressing the second and third criteria of the memo, i.e. you must refer to at least two commentletters.