AASB 116 Property, Plant and Equipment 50-59: Depreciable amount and period: allocate cost less residual value systematically over useful life, review residual value and useful life at least each year end as a change in estimate, depreciate from availability for use until held-for-sale classification or derecognition, consider usage, wear, obsolescence and legal limits, and treat land and buildings separately

What does 50-59 require?

The depreciable amount (cost less residual value) is spread systematically over the useful life. Residual value and useful life are reassessed at least annually at the year end and any change is a change in accounting estimate under AASB 108. Depreciation continues even if fair value exceeds carrying amount, provided residual value does not; it becomes nil only while residual value equals or exceeds carrying amount. It starts when the asset is ready for its intended use and stops at the earlier of held-for-sale classification under AASB 5 and derecognition, so idleness or retirement from active use does not stop it unless the asset is fully depreciated, although usage-based methods can give a nil charge when nothing is produced. Useful life reflects expected usage, physical wear and tear (shifts, maintenance, care while idle), technical or commercial obsolescence (including expected falls in selling prices of the asset's output) and legal limits such as lease expiry, and it is the period of utility to the entity, which may be shorter than economic life given its asset management policy. Land and buildings are separate assets even when bought together; land normally has an unlimited life and is not depreciated (quarries and landfill sites excepted), buildings are depreciated regardless of land value movements, and any restoration costs included in land are depreciated over the period of benefit.