ASRE 2410 - Review of an Interim Financial Report Performed by the Independent Auditor of the Entity - April 2006
Property Plant and Equipment and DepreciProperty Plant and Equipment and Depreciation
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Property Plant and Equipment and Depreciation
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Obtain a schedule of the property, plant and equipment indicating the cost and accumulated depreciation and determine whether it agrees with the trial balance.
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Enquire about the accounting policy applied regarding residual values, provisions to allocate the cost of property plant and equipment over their estimated useful lives using the expected pattern of consumption of the future economic benefits and distinguishing between capital and maintenance items. Consider whether the property, plant and equipment have suffered a material, permanent impairment in value.
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Discuss with management the additions and deletions to property, plant and equipment accounts and accounting for gains and losses on disposals or de-recognition. Enquire whether all such transactions have been accounted for.
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Enquire about the consistency with which the depreciation method and rates have been applied and compare depreciation provisions with prior years.
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Enquire whether there are any restrictions on the property, plan and equipment.
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Discuss whether lease agreements have been properly reflected in the interim financial report in conformity with current accounting pronouncements.