Name:-Akash Jaiswal ROLL NO.:-0645 ROOM NO.:-045 SESSION:-2014-2017 Topic:-Accounting For Fixed
Name:-Akash Jaiswal ROLL NO.:-0645 ROOM NO.:-045 SESSION:-2014-2017 Topic:-Accounting For Fixed
Name:-Akash Jaiswal ROLL NO.:-0645 ROOM NO.:-045 SESSION:-2014-2017 Topic:-Accounting For Fixed
ROLL NO.:-0645
ROOM NO.:-045
B.COM(M):-SEM-I
SESSION:-2014-2017
TOPIC:-ACCOUNTING FOR FIXED
ASSETS(AS-10)
INTRODUCTION- Accounting standard for fixed assets(AS-10) is issued by
Institute Of Chartered Accountant Of India(ICAI).As per ICAI, an asset is recognised as a
fixed asset if it satisfies the following criteria-
*held with the intention of being used for the purpose of producing/providing goods and
services.
Does not deal with-a) Accounting of forests/ plantations etc., wasting assets,
expenditure on real estate development and livestock,
c) Allocation of depreciation,
d) Treatment of Subsidies,
TYPES- Assets are of two types- a) tangible assets and intangible assets.
Tangible assets- Tangible assets are assets that one can touch, hold, or feel. In accounting
literature, tangible assets are the physical things that a business uses in the production of
goods and service.
Intangible assets- Intangible assets are identifiable non-monetary assets without physical
substance held for use in the production or supply of goods and services and are also
primarily financing items.
Fair market value- It is the price that would be agreed to in an open and
unrestricted market between knowledgeable and willing parties dealing at arm’s length who
are fully informed and are not under any compulsion to transact.
Gross book value- Gross book value of a fixed asset is its historical cost or other
amount substituted for historical cost in the books of account or financial statements. When
this amount is shown net of accumulated depreciation, it is termed as net book value.
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.
Other consideration-
Assets acquired on hire purchase- it is recorded at their cash value with a suitable
disclosure, that the enterprise does not have full ownership thereof.
Assets owned jointly with others- it is recorded in the balance sheet to the extent of the
enterprise’s share in such assets, original cost, accumulated depreciation and written down
value. Alternatively, the pro-rata cost of those assets may be grouped together with similar
fully owned assets with an appropriate disclosure.
Assets purchased for a consolidated price- where several assets are purchased for a
consolidated price, the consideration is apportioned to the various assets on a fair basis
determined by competent valuers.
Patents- Patents are normally written off over their legal term of validity or over their
working life, whichever is shorter.
i) Gross and net value of fixed assets at the beginning and end of an accounting
period showing additions, disposals, acquisitions and other movement.
ii) Expenditure incurred on account of fixed assets in the course of construction or
acquisition.
iii) Revalued amount substituted for historical costs of fixed assets, the method
adopted to compute the revalued amounts, the nature of any indicates used, the
year of any appraisal made and whether an external valuer was involved, in case
where fixed assets are stated at revalued amounts.
REFERENCE