Buildings: all costs related directly to acquisition or construction including materials, labour, overhead costs, professional fees and building permits. Equipment: all costs incurred in acquiring the equipment and preparing it for use, including purchase price, freight and handling charges, insurance on the equipment while in transit, cost of special foundations if required, assembling and installation costs, trial runs. Spare parts: carried as inventory and recognised in profit or loss. Major spare parts and stand-by equipment are qualified as PPE when an entity expects to use them during more than one period or if they can be used only in connection with an item of property. Deferred payment: difference between the cash price equivalent and the total payment is recognised as interest over the period of credit unless such interest is capitalised in accordance with IAS 23. Costs excluded: costs of opening a new facility, of introducing a new product or service (including costs of advertising and promotional activities), of conducting business in a new location or with a new class of customer, administration and other general overhead costs, of staff training, initial operating losses (starting and under-capacity losses). Self-constructed assets: costs include materials and direct labour; overhead can be handled in two ways: assign no fixed overhead or assign a portion of all overhead to the construction process (preferred). Costs subsequent to acquisitions: when the costs can be measured reliably and it is probable that the company will obtain future economic benefits (increases in useful life, quantity of production and quality). Cost model: = cost – any accumulated depreciation – accumulated impairment losses. Under this model for PPE asset is depreciated if estimated useful life can be determined: need for depreciable base, assets useful life and depreciation method; the asset also need to be impaired if needed. Depreciable base = acquisition cost – residual value. IFRS requires that each part of an item of PPE that is significant to the total cost of the asset must be depreciated separately. Useful life: service life offers differ from physical one; companies retire assets for two reasons: physical factors or economic factors (causality, expiration). Method for depreciation, it needs to be systematic and rationale: Activity method: Depreciable base/tot units produced; Straight-line method: Depreciable base/years of production; Diminishing (accelerated) charge method: sum of the years,