Bulletin C-6 Properties, machinery and equipment | Valuation rules

Bulletin C6 Real estate, machinery and equipment

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NIF, what are they?

The Financial Reporting Standards (NIF) constitute a set of accounting principles, rules and guidelines developed by the Mexican Financial Reporting Standards Council (CINIF) in order to regulate the preparation and presentation of financial information in Mexico, these standards define the guidelines that companies must follow when preparing their financial statements, with the purpose of guaranteeing the uniformity, reliability and comparability of accounting information. 


NIFs address various accounting aspects, ranging from the valuation of assets and liabilities to the recognition of income and expenses, as well as the structure of financial statements, since their application is essential not only for listed companies, but also for those that seek to comply with international standards, given that NIFs are aligned with International Financial Reporting Standards (IFRS/IFRS), facilitating the harmonization of accounting practices at a global level. That is, NIFs play a fundamental role in standardizing and improving the quality of financial information in Mexico, providing users with the certainty that the financial statements accurately reflect the economic and financial situation of the entities.

What are IFRS?

International Financial Reporting Standards (IFRS) constitute a set of global accounting standards Developed by the International Accounting Standards Board (IASB), its main objective is to establish common principles and guidelines for the preparation and presentation of financial statements of companies internationally. IFRS seeks to promote transparency, comparability and reliability. of financial information, allowing users, such as investors, analysts and regulators, to clearly and consistently understand the financial performance of entities.

These standards cover a wide range of accounting topics, including the valuation of assets and liabilities, the recognition of income and expenses, and the presentation of financial statements, their application is vital for companies operating in international financial markets, since IFRS They provide a coherent and harmonized framework, facilitating the comparison of financial reports between different jurisdictions.

In addition, IFRS is designed to adapt to the evolution of business and accounting practices, promoting the adoption of updated and relevant standards, IFRS plays a fundamental role in creating a global accounting language that promotes integrity and efficiency in international financial markets.


Bulletin C-6 Bulletin C-6 Properties, machinery and equipment

NIF C-6 provides guidelines on How companies should evaluate and recognize these assets in their financial statements, which includes the determination of cost, depreciation or amortization, impairment testing, and the appropriate presentation of information in the financial statements.


Objective of this standard:


Define the principles for valuing, presenting and disclosing information about real estate, furniture and equipment, commonly referred to as fixed assets, the purpose is to provide users of financial statements with details about the Bank's investment in these assets, as well as report any changes that have occurred in such investments.


Evaluation standards according to standard C-6


  • Recognition – General


An item that meets the definition of property, plant and equipment must be identified and accounted for as an asset both on initial recognition and in subsequent periods if:


  1. It is probable that future economic benefits related to the asset will flow to the entity, using logical and sustainable assumptions that reflect management's best estimate of the economic conditions that will prevail over the useful life of the asset.

  2. The acquisition cost of the component can be reliably evaluated to comply with the valuation principle.


Initial recognition 


Rule: A component that meets the conditions to be recognized as an asset must be valued on initial recognition at its acquisition cost.




The acquisition cost of a component must include:


  • The cost of acquisition, which includes duties, taxes, import charges, non-recoverable indirect taxes, as well as professional fees, insurance, storage and other costs related to the purchase, after considering any discounts or reductions in the price.

  • All expenses directly related and essential to placing the component in the necessary location and condition, so that it can operate as planned by management.

  • The initial estimate of expenses linked to an obligation associated with the removal of the component, arising either as a liability when acquiring the component or as a result of the use of the component over a specific period.


There are various costs that must be taken into account for the valuation of real estate, machinery and equipment, among them are: 


  • Directly attributable costs so that a component can operate in the manner intended by management

  • Costs associated with the removal of a component 

  • Costs that should not be part of the acquisition cost

Modifications to the Initial cost

There are major inspections and maintenance, adaptations, improvements or reconstructions that have the significant effect of extending the useful life of a component beyond the original estimate or significantly increasing its productivity. In such situations, the treatment indicated in paragraphs to of the NIF must be applied. 


However, in accordance with the recognition criteria set out in paragraph 42.1, the entity should not include in the acquisition cost of a component expenses related to periodic maintenance or repairs of the component, as described in the following paragraph.

Repairs and periodic maintenance

Repairs and periodic maintenance should not be accounted for as assets, since their effect is simply to maintain a component in normal conditions of service or use. These costs were implicitly considered when originally estimating the useful life of the component and should be recorded in the results. as they are accrued and expenses associated with periodic maintenance, which primarily include labor costs and consumables, such as the cost of small parts, should not be capitalized.

Inspections and major maintenance

A condition for the continued operation of some assets, such as an aircraft, may involve periodic major inspections to identify defects, regardless of whether or not their components are replaced, since when major inspection or maintenance is carried out, the Associated costs must be recognized in the acquisition cost of the asset as a replaced component, provided that the conditions for its recognition are met as indicated in paragraph 42.1 of the standard.


Simultaneously, any net carrying value of a previous inspection or major maintenance that remains on the asset subject to the inspection or major maintenance must be written off, this includes any previous inspection or major maintenance costs that are part of the replaced physical parts. .


It is necessary to proceed with the deregistration, regardless of whether the cost of the previous inspection or major maintenance was linked to the acquisition or construction of the asset and if necessary, the estimated cost of a similar inspection or major maintenance in the future can be used as a reference to determine what the cost incurred was at the time of acquiring or constructing the asset.

Adaptations or improvements

Adaptations or improvements to a component are investments that result in an increase in the value of the existing component, either by improving its serviceability, efficiency, extending its useful life or reducing its future operating costs, if these expenditures comply with one or several of these characteristics are considered adaptations or improvements and must be recognized as a component, provided that the recognition conditions established in paragraph 42.1 of the Standard are met.

The cost associated with adaptations or improvements should be recognized as a separate component of the acquisition cost of the original asset, in addition to providing more detailed information, the acquisition cost of the adaptation or improvement may have a different useful life than that applied to the cost of acquisition of the original asset.

Some components, when subjected to adaptation or improvement, may need to be replaced at regular intervals, as in the case of furnace linings or parts of an aircraft such as turbines or seats and in compliance with the recognition criterion established in paragraph 42.1, the An entity must record the replacement cost of a component within the net carrying value of that component when the cost is incurred, provided that the recognition conditions are satisfied.

The net book value of the replaced parts must be eliminated according to the provisions indicated in this FRS (see paragraphs 48.1 to 48.7 of the Standard). In the case of adaptations to leased premises, the acquisition cost of the adaptations should be recognized as a component only if the recognition conditions set out in paragraph 42.1 are met.



Some assets may undergo such extensive modifications that, instead of being simple adaptations or repairs, they constitute complete reconstructions. This situation is more common in buildings and certain types of machinery. It is undeniable that reconstructions increase the value of the asset and, therefore, , must be treated as capitalizable investments, as long as the criteria for their recognition established in paragraph 42.1 of the Standard in question are met.

Main items

  • land
  • Buildings
  • Machinery, production equipment, transportation equipment, computing equipment and others
  • Tool and other operation equipment
  • Molds, dies, negatives and other similar items

Depreciation method suggested by this standard

The depreciation method used must represent the anticipated pattern for obtaining future economic benefits of the component; it is required to review the depreciation method applied to the component at least at the end of each annual period or normal operating cycle of the entity, only in cases of substantial changes in the expected pattern of obtaining future economic benefits of the component, the method must be modified to reflect the new pattern, this modification must be recognized prospectively as a change in an accounting estimate according to NIF B-1.

There are various depreciation methods to systematically and reasonably distribute the depreciable amount of a component throughout its useful life, such as activity methods, straight line methods, decreasing charges and special depreciation methods (see Appendix A – Implementation Guidelines ). 

The entity must select the method that best reflects the expected pattern of future economic benefit realization of the component, taking into account internal policies and the characteristics of the asset, and this method must be applied uniformly in all periods, unless a change in the expected pattern of obtaining said future economic benefits.

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