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6) Know what adjustments are necessary during consolidations for PP&E accounts?

6) Know what adjustments are necessary during consolidations for PP&E accounts?

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Adjustments that are necessary during consolidation of PP&E accounts:

The PP&E a/c initially measured at historic value i.e actual cost that the asset is bought and other costs like registration etc spent at the time of purchase of asset.There onward every year there will be decline in value in form of depreciation due to the use of asset where land is an exemption for it and any additions during the year will be added and such value is known as book value.It can be simply explained by the following formula:

BOOK VALUE OF PP&E=GROSS PP&E+ADDITIONS-ACCUMULATED DEPRECIATION.

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