Accounting standard 10 accounting for fixed

Accounting standard 10 accounting for fixed

Alternatively, the pro rata cost of such jointly owned assets may be grouped together with similar fully owned assets with an appropriate disclosure thereof. Fixed assets should be eliminated from the financial statements on disposal or when no further benefit is expected from its use and disposal. They should be shown in the balance sheet with an appropriate narration to indicate that the enterprise does not have full ownership thereof 46 Financial Audit Autonomous Bodies, AS 6 and AS Session 1. Fixed asset acquired in exchange for shares or other securities should be recorded at FMV of assets given up or asset acquired, whichever is more clearly evident. Various depreciation methods could be used for allocating the depreciable amount of an asset on a methodical basis over the useful life of the asset. For these purposes fair market value may be determined by reference either to the asset given up or to the asset acquired, whichever is more clearly evident. Depreciation is allocated so as to charge a fair proportion of the depreciable amount in each accounting period during the expected useful life of the asset. The amount standing in revaluation reserve following the retirement or disposal of an asset which relates to that asset may be transferred to general reserve. When this amount is shown net of accumulated depreciation, it is termed as net book value. The standard also prescribes, that the residual value and useful life of an asset must be reviewed at the end of each financial year and, in case the expectations vary from the previous estimates, changes must be accounted for as changes in accounting estimate as per Accounting Standard 5 — Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies. Alternatively, the pro rata cost of such jointly owned assets may be grouped together with similar fully owned assets with an appropriate disclosure thereof 47 Financial Audit Autonomous Bodies, AS 6 and AS Session 1.

Alternatively, the pro rata cost of such jointly owned assets may be grouped together with similar fully owned assets with an appropriate disclosure thereof 47 Financial Audit Autonomous Bodies, AS 6 and AS Session 1.

A change from one method of providing depreciation to another should be made only if the adoption of the new method is required by statute or for compliance with an accounting standard or if it is considered that the change would result in a more appropriate preparation or presentation of the financial statements of the enterprise.

As per revaluation model, once the asset is recognized and its fair value could be measured reliably, then it must be carried at the revalued amount, which is the fair value of such asset at the date of the revaluation as reduced any following accumulated depreciation and accumulated impairment losses if any.

Where there is a revision of the estimated useful life of an asset, the unamortised depreciable amount should be charged over the revised remaining useful life.

cwip accounting standard

They should be shown in the balance sheet with an appropriate narration to indicate that the enterprise does not have full ownership thereof 46 Financial Audit Autonomous Bodies, AS 6 and AS Session 1. Fixed asset acquired in exchange for shares or other securities should be recorded at FMV of assets given up or asset acquired, whichever is more clearly evident.

In case the change in the method results in surplus, the surplus should be credited to the statement of profit and loss.

Depreciation accounting standard

The depreciation on such addition or extension may also be provided at the rate applied to the existing asset. The method of accounting for fixed assets included at historical cost is set out in following paragraphs; the method of accounting of revalued assets is also set out in following paragraphs. Depreciable amount of any asset should be allocated on a methodical basis over the useful life of the asset. Also Read Notes on :. Financing costs relating to deferred credits or to borrowed funds attributable to construction or acquisition of fixed assets for the period up to the completion of construction or acquisition of fixed assets should also be included in the gross book value of the asset to which they relate. Alternatively, the pro rata cost of such jointly owned assets may be grouped together with similar fully owned assets with an appropriate disclosure thereof 47 Financial Audit Autonomous Bodies, AS 6 and AS Session 1. Fixed asset acquired in exchange for shares or other securities should be recorded at FMV of assets given up or asset acquired, whichever is more clearly evident. In case the change in the method results in surplus, the surplus should be credited to the statement of profit and loss. Only purchased goodwill should be recorded in books.

This statement deals with accounting for fixed assets except as described in following paragraphs. Various depreciation methods could be used for allocating the depreciable amount of an asset on a methodical basis over the useful life of the asset.

Ppe accounting standard

The standard also prescribes, that the residual value and useful life of an asset must be reviewed at the end of each financial year and, in case the expectations vary from the previous estimates, changes must be accounted for as changes in accounting estimate as per Accounting Standard 5 — Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies. Revaluation of fixed assets should be restricted to the net recoverable amount of fixed asset. Fixed asset acquired in exchange for shares or other securities should be recorded at FMV of assets given up or asset acquired, whichever is more clearly evident. Material items retired from active use and held for disposal should be stated at the lower of their net book value and net realizable value and shown separately. In case the change in the method results in surplus, the surplus should be credited to the statement of profit and loss. This basis should be disclosed. Depreciable amount of any asset should be allocated on a methodical basis over the useful life of the asset. Fixed Asset is an asset held with the intention of being used for the purpose of producing or providing goods or services and is not held for sale in the normal course of business. When this amount is shown net of accumulated depreciation, it is termed as net book value. The methods include SLM Straight-line Method , diminishing balance method or units of production method. Various depreciation methods could be used for allocating the depreciable amount of an asset on a methodical basis over the useful life of the asset. The deficiency or surplus arising from retrospective recomputation of depreciation in accordance with the new method should be adjusted in the accounts in the year in which the method of depreciation is changed. The method of depreciation employed must reflect the pattern of future economic benefits of the asset consumed by an enterprise. That basis must be disclosed. Where an addition or extension retains a separate identity and is capable of being used after the existing asset is disposed of, depreciation should be provided independently on the basis of an estimate of its own useful life.

The amount standing in revaluation reserve following the retirement or disposal of an asset which relates to that asset may be transferred to general reserve.

Fixed Asset is an asset held with the intention of being used for the purpose of producing or providing goods or services and is not held for sale in the normal course of business.

10 accounting standards

When a fixed asset is revalued, an entire class of assets should be revalued or selection of assets for revaluation should be made on a systematic basis. According to the cost model, after recognizing the asset as an item of property or plant and equipment, it should be carried at the cost less the accumulated depreciation and the accumulated impairment losses if any.

Accounting standards

Depreciation includes amortization of assets whose useful life is predetermined. When this amount is shown net of accumulated depreciation, it is termed as net book value. Fixed asset acquired in exchange for shares or other securities should be recorded at FMV of assets given up or asset acquired, whichever is more clearly evident. Where there is a revision of the estimated useful life of an asset, the unamortised depreciable amount should be charged over the revised remaining useful life. When fixed asset is acquired in exchange for another asset, the cost of the asset acquired should be recorded - either at, fair market value - or at, the net book value of the assets given up For this purpose, fair market value may be determined by reference either to the asset given up or to the asset acquired, whichever is more clearly evident. Subsequent expenditures related to an item of fixed asset should be added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance. The amount standing in revaluation reserve following the retirement or disposal of an asset which relates to that asset may be transferred to general reserve. That basis must be disclosed. Where an addition or extension retains a separate identity and is capable of being used after the existing asset is disposed of, depreciation should be provided independently on the basis of an estimate of its own useful life. Fixed Asset is an asset held with the intention of being used for the purpose of producing or providing goods or services and is not held for sale in the normal course of business. Such a change should be treated as a change in accounting policy and its effect should be quantified and disclosed. It is expected to be used for more than one accounting period. When a fixed asset is revalued, an entire class of assets should be revalued or selection of assets for revaluation should be made on a systematic basis.

Depreciable amount of any asset should be allocated on a methodical basis over the useful life of the asset. It is expected to be used for more than one accounting period.

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AS (Accounting for Fixed Assets)