Initial Measurement of PPE:
The initial costs of an item of property, plant, and equipment should be recognized as an asset if it meets the following criteria:

• It is probable that future economic benefits associated with the item will flow to the entity.
• The cost of the item can be measured reliably.

Components of Initial Cost:

1. Purchase Price: The actual purchase price of the asset, less any trade discounts or rebates (but excluding settlement discounts).
2. Directly Attributable Costs: These include costs directly related to bringing the asset to its intended working condition, such as:
   • Costs of site preparation, delivery, and handling.
   • Installation and assembly costs.
   • Professional fees, such as legal and consulting fees.
3. Dismantling and Removal Costs: The estimated costs of dismantling, removing the asset, and restoring the site, provided these costs are recognized as a provision under IAS 37.

Subsequent Expenditure:
Subsequent expenditure on an asset should be capitalized only if:

• It enhances the future economic benefits of the asset (for example, by improving performance or extending the asset’s useful life).
• It is a replacement of part of the asset, where the replaced part is written off.
  Routine maintenance and minor repairs should be expensed as incurred and not capitalized.