[Verse 1] When we acquire machinery, buildings, or equipment Recognition starts if future benefits are evident Control confirmed, cost measured with precision clear Physical substance makes these assets appear [Chorus] R-M-C-D, the framework we need Recognition, Measurement, Components, Depreciation indeed Cost or revaluation, pick your measurement mode IAS Sixteen lights the asset road [Verse 2] Initial measurement captures purchase price complete Installation costs and duties make the total sweet But training staff and grand opening celebration Those revenue expenses need elimination [Chorus] R-M-C-D, the framework we need Recognition, Measurement, Components, Depreciation indeed Cost or revaluation, pick your measurement mode IAS Sixteen lights the asset road [Verse 3] Componentization breaks apart the complex whole Engine separate from the aircraft's body and soul Different useful lives demand their own accounting Each component's depreciation worth mounting [Bridge] Straight line spreads the cost through years of use Units of production when activity's the clue Diminishing balance front-loads the expense Each method serves a different consequence [Verse 4] Revaluation model brings fair value to the scene Surplus goes to equity, keeping income clean Annual assessments keep the balance true While impairment losses cut right through [Chorus] R-M-C-D, the framework we need Recognition, Measurement, Components, Depreciation indeed Cost or revaluation, pick your measurement mode IAS Sixteen lights the asset road [Outro] Derecognition comes when disposal is complete Or when future benefits face defeat Gain or loss hits profit without delay IAS Sixteen shows the way
← Inventory Accounting - IAS 2 | Intangible Assets - IAS 38 →