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HMRC internal manual

Business Income Manual

Tax and accountancy: Property, plant and equipment

This guidance refers to section 17 of FRS102. Other accounting standards dealing with property, plant and equipment (or tangible fixed assets) include FRS 15 and IAS 16, neither of which is significantly different to section 17 of FRS102.

Section 17 of FRS102 sets out the principles for the recognition and measurement of property, plant and equipment. It describes the items that should be included in the cost of an item of property, plant and equipment, including the circumstances in which subsequent expenditure should be added to the carrying amount of the asset. This does not correspond with the capital/revenue distinction for tax purposes. For tax purposes it is necessary to ascertain the nature of the expenditure and then, for allowable revenue deductions, to follow the timing of recognition shown in the accounts.

See BIM31065 for renewals accounting under FRS15.