ASC Topic 360
Property, Plant, and Equipment
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ASC 360 covers the accounting for property, plant, and equipment: capitalizing cost, allocating it to periods through systematic and rational depreciation, testing long-lived assets for impairment, and reporting assets to be disposed of. The general guidance in 360-10 supplies the core model — depreciation as a process of allocation, not valuation (360-10-35-3 through 35-4); a two-step held-and-used impairment test triggered by indicators (360-10-35-21) that compares carrying amount to undiscounted future cash flows and then writes the asset group down to fair value with no restoration (360-10-35-17, 35-20); and held-for-sale classification under the six criteria in 360-10-45-9, with measurement at the lower of carrying amount or fair value less cost to sell and no depreciation (360-10-35-43). Layered on top are industry subtopics that tailor capitalization, depreciation, presentation, and impairment inputs for airlines, agriculture, cable television, mining, oil and gas, insurance, health care, regulated utilities, real estate projects, CIRAs, employee benefit plans, and not-for-profits. Note also that two subtopics are now empty shells — 360-20 (real estate sales, superseded by ASC 606/610-20/842-40) and 360-910 — and may not be cited as authoritative support.
Subtopics
- 10Overall170 ¶
ASC 360-10 governs the accounting for property, plant, and equipment and, in separate "Impairment or Disposal of Long-Lived Assets" Subsections, the impairment testing of long-lived assets held and used and the measurement, presentation, and disclosure of long-lived assets to be disposed of. Cost (including capitalized interest) is allocated to periods through systematic and rational depreciation (360-10-35-4). A held-and-used asset group is written down only if its carrying amount fails an undiscounted cash flow recoverability test, and then only down to fair value (360-10-35-17); held-for-sale assets are measured at the lower of carrying amount or fair value less cost to sell and are not depreciated (360-10-35-43).
- 20Real Estate Sales160 ¶
ASC 360-20 formerly contained the specialized U.S. GAAP for recognizing profit on sales of real estate (the old FASB Statement No. 66 model with full accrual, installment, cost recovery, deposit, and percentage-of-completion methods, plus sale-leaseback and continuing-involvement rules). Every paragraph in the subtopic has been superseded — mostly by ASU 2014-09 (Revenue from Contracts with Customers) and ASU 2016-02 (Leases). Sales of real estate are now accounted for under ASC 606 if the counterparty is a customer, or under ASC 610-20 for sales of nonfinancial assets to noncustomers, with sale-leaseback transactions governed by ASC 842-40.
- 905Agriculture28 ¶
ASC 360-905 governs how agricultural producers account for property, plant, and equipment — land development, orchards/groves/vineyards, intermediate-life plants, and animals. The core rule is that development costs (permanent and limited-life land development, cultural costs of trees and vines, and direct and indirect costs of developing animals) are capitalized during the development period; permanent land development is never depreciated because it has an indefinite life, while limited-life development, plantings, and mature breeding/production animals are depreciated over estimated useful or productive lives beginning when commercial production or maturity is reached.
- 908Airlines22 ¶
ASC 360-908 governs property, plant, and equipment accounting unique to airlines: unit versus group depreciation, rotable parts, airframe modifications, and airframe/engine overhauls. Its core rules are that modifications enhancing an aircraft's usefulness must be capitalized and depreciated over the shorter of the aircraft's or the modification's useful life, and that overhauls must be accounted for under one of three permitted methods—direct expensing, built-in overhaul, or deferral—with the accrue-in-advance (accrual) method prohibited.
- 910Contractors—Construction5 ¶
ASC 360-910 was the construction-contractor-specific guidance on property, plant, and equipment, but every substantive paragraph (05-1, 15-1, 25-1, and 35-1) was superseded by Maintenance Update No. 2019-01. The subtopic is now an empty shell containing no operative recognition, measurement, or scope guidance. Contractors therefore apply the general PP&E guidance in ASC 360-10 (and, for contract accounting, ASC 606 and ASC 340-40).
- 922Entertainment—Cable Television15 ¶
This subtopic governs how cable television entities account for plant and installation costs during the "prematurity period" — the span between the start of construction/marketing and the point at which the system is substantially complete and serving subscribers. Management must fix the prematurity period before revenue from the first subscriber is recognized (presumed not to exceed two years), capitalize cable plant costs and initial subscriber installation costs in full during that period, and record depreciation using a subscriber-based fraction rather than full depreciation. Distinguishable portions of a system in the prematurity period are accounted for and tested for recoverability separately.
- 930Extractive Activities—Mining6 ¶
This Subtopic gives mining-specific guidance on accounting for mineral rights and mining assets within Property, Plant, and Equipment. It clarifies that undeveloped land does not qualify for interest capitalization, how mineral resource asset current costs are measured when current cost disclosures are provided, and—most importantly—that impairment cash flow estimates for mining assets must include value beyond proven and probable reserves (with the related development and extraction outflows) and must reflect market-participant assumptions about mineral price fluctuations.
- 932Extractive Activities—Oil and Gas106 ¶
This subtopic governs how oil and gas entities capitalize, amortize, impair, and dispose of industry-specific property, plant, and equipment—mineral interests in properties, wells and related equipment and facilities, support equipment and facilities, and uncompleted wells—under the successful efforts method (full cost accounting is left to SEC literature). Only exploration and development costs that relate directly to specific oil and gas reserves are capitalized; other costs are expensed, and exploratory well costs are held in uncompleted wells pending a determination of whether proved reserves were found. Capitalized proved property and well costs are amortized by the unit-of-production method, unproved properties are periodically assessed for impairment via a valuation allowance, and conveyances of mineral interests generally produce no gain when they are poolings of assets or involve substantial future performance obligations.
- 942Financial Services—Depository and Lending6 ¶
This Subtopic addresses how depository and lending institutions (banks, savings institutions, credit unions) present property, plant, and equipment in their financial statements. Premises and equipment are generally reported as a single balance sheet caption, net of accumulated depreciation and amortization, with the accumulated amount shown on the face of the balance sheet or in the notes. Net gains or losses on disposition of premises and equipment go into noninterest income or noninterest expense rather than a separate line.
- 944Financial Services—Insurance22 ¶
This subtopic tells insurance entities how to account for and report real estate. Real estate is classified by predominant use as either a real estate investment or real estate used in the business, and real estate acquired in settling mortgage guaranty and title insurance claims is a third, separately reported category measured initially at fair value (investments are measured at cost, then cost less accumulated depreciation). Depreciation and impairment charges follow the balance sheet classification — investment income/realized gains and losses for investments, and adjustments to claim costs incurred for real estate acquired in settling claims.
- 954Health Care Entities3 ¶
This industry subtopic addresses how health care entities present property that is held for investment purposes rather than used in operations. Its single substantive rule is that such property is reported as part of investments (360-954-45-1), not within operating property, plant, and equipment. Its scope follows the health care entities Overall Subtopic scope in Section 954-10-15.
- 958Not-for-Profit Entities35 ¶
This subtopic governs long-lived tangible assets held by not-for-profit entities, including contributed property, plant, and equipment and collection items. Its core rules are that all NFPs must recognize depreciation on long-lived tangible assets (360-958-35-1), that contributed PP&E is recognized under the Contributions Received Subsections of 958-605 with initial measurement including all costs to place the asset in use (360-958-30-1), and that an NFP holding a "collection" may elect one of three policies—full capitalization, prospective capitalization, or no capitalization—but capitalizing selected items is precluded (360-958-25-3).
- 960Plan Accounting—Defined Benefit Pension Plans5 ¶
This Subtopic governs how a defined benefit pension plan accounts for property, plant, and equipment it uses in operating the plan (buildings, equipment, furniture and fixtures, leasehold improvements). Unlike plan investments, which are generally reported at fair value, these operating assets are presented at cost less accumulated depreciation or amortization (360-960-35-1). The rationale is that expenditures for operating assets are advance payments for future administrative services rather than investments expected to generate cash flows to pay benefits (360-960-35-2).
- 962Plan Accounting—Defined Contribution Pension Plans4 ¶
This subtopic governs how a defined contribution pension plan accounts for property, plant, and equipment that the plan itself uses in its operations. The core rule is that such operating assets — buildings, equipment, furniture and fixtures, and leasehold improvements — are reported at cost less accumulated depreciation or amortization, rather than at fair value like investment assets.
- 965Plan Accounting—Health and Welfare Benefit Plans6 ¶
This subtopic tells health and welfare benefit plans how to measure property, plant, and equipment on the plan's financial statements. Assets used in plan operations (buildings, equipment, furniture and fixtures, leasehold improvements) are carried at cost less accumulated depreciation or amortization, while real estate and other holdings held as plan investments are reported at fair value less costs to sell, if significant, as of the financial statement date.
- 970Real Estate—General29 ¶
ASC 360-970 gathers the real estate–specific property, plant, and equipment guidance in two sets of subsections: Real Estate Syndication and Real Estate Project Costs. It requires costs clearly associated with the acquisition, development, and construction of a real estate project to be capitalized and then allocated to project components (by specific identification, then relative fair value/sales value, then area methods), addresses donated and abandoned real estate and changes in use, and applies the Subtopic 360-10 impairment model project by project. For syndications, fees paid to and rentals received from a developer-seller under a master leaseback are adjustments to the basis of the property.
- 972Real Estate—Common Interest Realty Associations13 ¶
This Subtopic tells common interest realty associations (CIRAs) — cooperatives, condominium associations, and homeowners associations — when to recognize common real and personal property as assets, how to measure it, and what to disclose. Cooperatives recognize all common real property because they hold title and can dispose of it and keep the proceeds; other CIRAs generally do not recognize real property directly associated with the units, and recognize property not directly associated with the units only if they have title or other evidence of ownership plus disposal discretion or significant cash-flow generation. Recognized property is measured at cost (or fair value if acquired in a nonmonetary transaction such as a developer transfer) and depreciated over estimated useful lives.
- 980Regulated Operations61 ¶
This Subtopic tells regulated entities (utilities) how to account for property, plant, and equipment in three situations: plant abandonments, disallowances of costs of recently completed plants, and capitalization of an allowance for funds used during construction (AFUDC). When abandonment becomes probable, the asset's cost comes out of construction work-in-process or plant-in-service and a separate new asset is recorded — at full cost if a full return on investment is likely to be provided, or at the present value of expected future recovery revenues (discounted at the entity's incremental borrowing rate) if partial or no return is likely, with the shortfall and any probable, estimable disallowance recognized as a loss. When it becomes probable that part of the cost of a recently completed plant will be disallowed for rate-making purposes and the amount is reasonably estimable, that amount is deducted from the plant's reported cost and recognized as a loss.