On 1 September 2019, a company paid GHS250,000 for a major inspection of one of its aircraft. It is a legal requirement that such an inspection is carried out at least once every three years. The previous inspection took place in March 2017 at a cost of GHS210,000. The carrying amount of the aircraft on 1 September 2019 (before accounting for the new inspection) was GHS1,200,000. Of this amount, GHS70,000 related to the previous inspection. 

Explain how each of these transactions should be accounted for in accordance with the requirements of IAS 16.

Answer rating: 100% (QA)

Step 13 As per paragraph 14 of IAS 16 Property Plant and Equipment continued operation of an item of ... View the full answer