ACCOUNTING FOR ACCOUNTING FOR
FIXED ASSETS FIXED ASSETS
AS – 10
AS – 10
AS-10 DEALS WITH AS-10 DEALS WITH
RECOGNITION OF FIXED ASSETS RECOGNITION OF FIXED ASSETS
ELEMENTS THAT CONSTITUTE ELEMENTS THAT CONSTITUTE COST OF ITEMS OF FIXED COST OF ITEMS OF FIXED
ASSETS ASSETS
THE AREAS REQUIRING SPECIFIC THE AREAS REQUIRING SPECIFIC ACCOUNTING TREATMENT
ACCOUNTING TREATMENT
AS 10 DOES NOT DEAL AS 10 DOES NOT DEAL
WITH WITH
FORESTS, FORESTS, PLANTATIONS PLANTATIONS AND AND SIMILAR RE-GENERATIVE SIMILAR RE-GENERATIVE
NATURAL RESOURCES.
NATURAL RESOURCES.
WASTING ASSETS LIKE MINERALS, WASTING ASSETS LIKE MINERALS, OILS AND NATURAL GAS.
OILS AND NATURAL GAS.
EXPENDITURE ON REAL ESTATE EXPENDITURE ON REAL ESTATE DEVELOPMENT.
DEVELOPMENT.
LIVE STOCK. LIVE STOCK.
RECOGNITION OF FIXED RECOGNITION OF FIXED
ASSETS ASSETS
FIXED ASSET IS AN ASSET HELD WITH FIXED ASSET IS AN ASSET HELD WITH THE INTENTION OF BEING USED FOR THE INTENTION OF BEING USED FOR MANUFACTURING OF GOODS (OR) MANUFACTURING OF GOODS (OR) PROVIDING SERVICES
PROVIDING SERVICES
EG:LAND,BUILDINGS,MACHINERY EG:LAND,BUILDINGS,MACHINERY
FURNITURE AND FITTINGS FURNITURE AND FITTINGS
NOT HELD FOR SALE IN THE NORMAL NOT HELD FOR SALE IN THE NORMAL COURSE OF BUSINESS
COURSE OF BUSINESS
EXPECTED TO BE USED FOR MORE EXPECTED TO BE USED FOR MORE THAN ONE ACCOUNTING PERIOD
THAN ONE ACCOUNTING PERIOD
ELEMENTS THAT CONSTITUTE ELEMENTS THAT CONSTITUTE
COST COST
PURCHASED FIXED ASSET PURCHASED FIXED ASSET
SELF SELF CONSTRUCTED CONSTRUCTED FIXED FIXED ASSET
ASSET
FIXED ASSETS ACQUIRED IN FIXED ASSETS ACQUIRED IN EXCHANGE / PART EXCHANGE EXCHANGE / PART EXCHANGE
FOR ANOTHER ASSET FOR ANOTHER ASSET
FIXED ASSETS ACQUIRED IN FIXED ASSETS ACQUIRED IN EXCHANGE OF SHARES OR EXCHANGE OF SHARES OR
OTHER SECURITIES
OTHER SECURITIES
VALUE OF PURCHASED FIXED VALUE OF PURCHASED FIXED
ASSET ASSET
TOTAL VALUE OF THE ASSET TOTAL VALUE OF THE ASSET
EXCLUDE TAXES REFUNDABLE EXCLUDE TAXES REFUNDABLE
EXPENDITURE EXPENDITURE INCURRED INCURRED TO TO BRING THE ASSETS TO ITS BRING THE ASSETS TO ITS WORKING CONDITITON FOR ITS WORKING CONDITITON FOR ITS WITTED USE
WITTED USE
AMOUNT AMOUNT OF OF GOVERNMENT GOVERNMENT GRANTS RECEIVED / RECEIVABLE GRANTS RECEIVED / RECEIVABLE AGAINST FIXED ASSET SHOULD BE AGAINST FIXED ASSET SHOULD BE DEDUCTED FROM THE COST OF DEDUCTED FROM THE COST OF FIXED ASSET.
FIXED ASSET.
VALUE OF SELF VALUE OF SELF
CONSTRUCTED FIXED ASSET CONSTRUCTED FIXED ASSET
SUCH FIXED ASSET, WHICH WAS SUCH FIXED ASSET, WHICH WAS CONSTRUCTED BY IN-HOUSE EFFORTS, IS CONSTRUCTED BY IN-HOUSE EFFORTS, IS CALLED SELF-CONSTRUCTED FIXED CALLED SELF-CONSTRUCTED FIXED ASSET. COST OF SELF-CONSTRUCTED ASSET. COST OF SELF-CONSTRUCTED FIXED ASSET INCLUDES THE FIXED ASSET INCLUDES THE FOLLOWING :-
FOLLOWING :-
ALL COSTS WHICH ARE DIRECTLY ALL COSTS WHICH ARE DIRECTLY RELATED TO THE SPECIFIC ASSET.
RELATED TO THE SPECIFIC ASSET.
ALL COSTS THAT ARE ATTRIBUTABLE TO ALL COSTS THAT ARE ATTRIBUTABLE TO THE CONSTRUCTION ACTIVITY SHOULD THE CONSTRUCTION ACTIVITY SHOULD BE ALLOCATED TO THE SPECIFIC ASSETS.
BE ALLOCATED TO THE SPECIFIC ASSETS.
ANY INTERNAL PROFIT INCLUDED IN THE ANY INTERNAL PROFIT INCLUDED IN THE COST SHOULD BE ELIMINATED.
COST SHOULD BE ELIMINATED.
VALUE OF FIXED ASSET AQUIRED VALUE OF FIXED ASSET AQUIRED
IN EXCHAGE / PART EXCHANGE IN EXCHAGE / PART EXCHANGE
FOR ANOTHER ASSET FOR ANOTHER ASSET
WHEN FIXED ASSETS EXCHANGED WHEN FIXED ASSETS EXCHANGED ARE OF NOT SIMILAR IN NATURE.
ARE OF NOT SIMILAR IN NATURE.
ASSETS ACQUIRED SHOULD BE ASSETS ACQUIRED SHOULD BE RECORDED EITHER AT FAIR RECORDED EITHER AT FAIR MARKET VALUE OF ASSET GIVEN MARKET VALUE OF ASSET GIVEN UP OR FAIR MARKET VALUE OF UP OR FAIR MARKET VALUE OF ASSET ACQUIRED IF THIS IS MORE ASSET ACQUIRED IF THIS IS MORE
CLEARLY EVIDENT
CLEARLY EVIDENT . .
VALUE OF FIXED ASSET AQUIRED IN VALUE OF FIXED ASSET AQUIRED IN
EXCHAGE / PART EXCHANGE FOR EXCHAGE / PART EXCHANGE FOR
ANOTHER ASSET ANOTHER ASSET
WHEN WHEN FIXED FIXED ASSETS ASSETS EXCHANGED ARE OF SIMILAR IN EXCHANGED ARE OF SIMILAR IN
NATURE.
NATURE.
ASSETS ACQUIRED IS ASSETS ACQUIRED IS RECORDED AT FAIR MARKET RECORDED AT FAIR MARKET VALUE OF ASSET GIVEN UP OR VALUE OF ASSET GIVEN UP OR FAIR MARKET VALUE OF ASSET FAIR MARKET VALUE OF ASSET ACQUIRED IF THIS IS MORE ACQUIRED IF THIS IS MORE CLEARLY EVIDENT OR NET BOOK CLEARLY EVIDENT OR NET BOOK
VALUE OF THE ASSET GIVEN UP.
VALUE OF THE ASSET GIVEN UP.
VALUE OF FIXED ASSET AQUIRED VALUE OF FIXED ASSET AQUIRED
IN EXCHAGE / PART EXCHANGE IN EXCHAGE / PART EXCHANGE
FOR ANOTHER ASSET FOR ANOTHER ASSET
WHEN FIXED ASSETS ARE ACQUIRED WHEN FIXED ASSETS ARE ACQUIRED IN EXCHANGE OF SHARES OR OTHER IN EXCHANGE OF SHARES OR OTHER
SECURITIES.
SECURITIES.
WHEN PAYMENT OF FIXED ASSETS IS WHEN PAYMENT OF FIXED ASSETS IS MADE IN SHARES OR SECURITIES MADE IN SHARES OR SECURITIES ASSET SHOULD BE RECORDED AT ASSET SHOULD BE RECORDED AT EITHER FAIR MARKET VALUE OF EITHER FAIR MARKET VALUE OF ASSET PURCHASED OR FAIR MARKET ASSET PURCHASED OR FAIR MARKET VALUE OF SHARE OR SECURITIES VALUE OF SHARE OR SECURITIES WHICHEVER IS MORE CLEARLY WHICHEVER IS MORE CLEARLY
AVAILABLE.
AVAILABLE.
REVALUATION REVALUATION
GENERALLY GENERALLY COMPETENT COMPETENT VALUER DOES REVALUATION VALUER DOES REVALUATION
THROUGH APPRIASAL.
THROUGH APPRIASAL.
REVALUATIONS MAY BE DONE REVALUATIONS MAY BE DONE USING PRICE INDEX USING PRICE INDEX APPROPRIATE TO THE APPROPRIATE TO THE
CONCERNED FIXED ASSET.
CONCERNED FIXED ASSET.
WHENEVER THE ASSETS ARE WHENEVER THE ASSETS ARE REVALUED THESE ASSETS ARE REVALUED THESE ASSETS ARE SHOWN AT REVALUED PRICE IN SHOWN AT REVALUED PRICE IN
FINANCIAL STATEMENT.
FINANCIAL STATEMENT.
REVALUATION REVALUATION
AN AN ENTIRE ENTIRE CLASS CLASS OF OF ASSETS SHOULD BE ASSETS SHOULD BE REVALUED OR THE REVALUED OR THE SELECTION OF ASSETS FOR SELECTION OF ASSETS FOR REVALUATION SHOULD BE REVALUATION SHOULD BE MADE ON SYSTEMATIC MADE ON SYSTEMATIC BASIS. THE BASIS MUST BE BASIS. THE BASIS MUST BE
DISCLOSED.
DISCLOSED.
REVALUATION REVALUATION
METHOD OF PRESENTATION OF METHOD OF PRESENTATION OF REVALUED ASSET IN FINANCIAL REVALUED ASSET IN FINANCIAL STATEMENT.
STATEMENT.
(1)(1)
BY RE-STATING THE GROSS BOOK BY RE-STATING THE GROSS BOOK VALUE AND ACCUMULATED VALUE AND ACCUMULATED DEPRECIATION.
DEPRECIATION.
(2)(2)
BY RE-STATING NET BOOK VALUE BY RE-STATING NET BOOK VALUE ADDING THERE IN THE NET ADDING THERE IN THE NET INCREASE ON ACCOUNT OF INCREASE ON ACCOUNT OF REVALUATION.
REVALUATION.
(3)(3)
REVALUATION OF FIXED ASSETS REVALUATION OF FIXED ASSETS SHOULD BE RESTRICTED TO THE SHOULD BE RESTRICTED TO THE NET RECOVERABLE AMOUNT OF NET RECOVERABLE AMOUNT OF FIXED ASSET.
FIXED ASSET.
ACCOUNTING TREATMENT OF ACCOUNTING TREATMENT OF
REVALUATION REVALUATION
FIRST FIRST TIME TIME UPWARD UPWARD REVALUATION.
REVALUATION.
INCREASE IN NET BOOK VALUE INCREASE IN NET BOOK VALUE IS CREDITED TO OWNER’S IS CREDITED TO OWNER’S INTEREST UNDER THE HEAD INTEREST UNDER THE HEAD
REVALUATION RESERVE.
REVALUATION RESERVE.
FIRST FIRST TIME TIME DOWNWARD DOWNWARD REVALUATION.
REVALUATION.
DECREASE IN NET BOOK DECREASE IN NET BOOK VALUE IS CHARGED TO THE VALUE IS CHARGED TO THE
PROFIT AND LOSS ACCOUNT.
PROFIT AND LOSS ACCOUNT.
ACCOUNTING TREATMENT OF ACCOUNTING TREATMENT OF
REVALUATION REVALUATION
FIRST FIRST TIME TIME DOWNWARD DOWNWARD REVALUATION AND SUBSEQUENTLY REVALUATION AND SUBSEQUENTLY
UPWARD REVALUATION.
UPWARD REVALUATION.
AMOUNT OF REVALUATION THAT AMOUNT OF REVALUATION THAT CAN BE CREDITED TO PROFIT AND CAN BE CREDITED TO PROFIT AND LOSS ACCOUNT IS RESTRICTED TO LOSS ACCOUNT IS RESTRICTED TO THE AMOUNT OF DEVALUATION THE AMOUNT OF DEVALUATION EARLIER WRITTEN OFF. BALANCE EARLIER WRITTEN OFF. BALANCE AMOUNT OF REVALUATION SHOULD AMOUNT OF REVALUATION SHOULD BE CREDITED TO REVALUATION BE CREDITED TO REVALUATION
RESERVE.
RESERVE.
ACCOUNTING TREATMENT OF ACCOUNTING TREATMENT OF
REVALUATION REVALUATION
FIRST TIME UPWARD REVALUATION FIRST TIME UPWARD REVALUATION AND SUBSEQUENTLY DOWNWARD AND SUBSEQUENTLY DOWNWARD REVALUATION.
REVALUATION.
AMOUNT OF DEVALUATION CAN BE AMOUNT OF DEVALUATION CAN BE CHARGED TO REVALUATION CHARGED TO REVALUATION RESERVE TO THE EXTENT THE RESERVE TO THE EXTENT THE REVALUATION RESERVE EARLIER REVALUATION RESERVE EARLIER CREDITED IS UNUTILIZED, THE CREDITED IS UNUTILIZED, THE BALANCE AMOUNT OF DEVALUATION BALANCE AMOUNT OF DEVALUATION IS CHARGED TO PROFIT AND LOSS IS CHARGED TO PROFIT AND LOSS ACCOUNT.
ACCOUNT.
VALUATION OF FIXED ASSETS VALUATION OF FIXED ASSETS
IN SPECIAL CASES IN SPECIAL CASES
ASSETS ACQUIRED ON HIRE PURCHASE TERMSASSETS ACQUIRED ON HIRE PURCHASE TERMS
SUCH ASSETS ARE RECORDED AT THEIR CASH SUCH ASSETS ARE RECORDED AT THEIR CASH PRICE.
PRICE.
COST OF JOINTLY HELD ASSETSCOST OF JOINTLY HELD ASSETS
EITHER THE ORIGINAL COST OR ACCUMULATED EITHER THE ORIGINAL COST OR ACCUMULATED DEPRECIATION AND WRITTEN DOWN VALUE DEPRECIATION AND WRITTEN DOWN VALUE SHOULD BE STATED IN THE BALANCE SHEET IN SHOULD BE STATED IN THE BALANCE SHEET IN THE PROPORTION IN WHICH THE ENTITY HAS THE PROPORTION IN WHICH THE ENTITY HAS RIGHT TO UTILIZE THE ASSET OR PRORATA OF RIGHT TO UTILIZE THE ASSET OR PRORATA OF SUCH JOINTLY OWNED ASSETS IS GROUPED SUCH JOINTLY OWNED ASSETS IS GROUPED TOGETHER WITH SIMILAR FULLY OWNED ASSETS.
TOGETHER WITH SIMILAR FULLY OWNED ASSETS.
FIXED ASSETS ACQUIRED AT CONSOLIDATED FIXED ASSETS ACQUIRED AT CONSOLIDATED PRICE
PRICE
COST OF EACH FIXED ASSET SHOULD BE COST OF EACH FIXED ASSET SHOULD BE DETERMINED ON A FAIR BASIS AS PER VALUATION DETERMINED ON A FAIR BASIS AS PER VALUATION BY COMPETENT VALUERS.
BY COMPETENT VALUERS.
IMPROVEMENTS AND REPAIR IMPROVEMENTS AND REPAIR
IF AFTER THE IMPROVEMENT AND REPAIRS, IF AFTER THE IMPROVEMENT AND REPAIRS, EXPECTED FUTURE BENEFITS FROM FIXED EXPECTED FUTURE BENEFITS FROM FIXED ASSETS DO NOT CHANGE THEN EXPENSES OF ASSETS DO NOT CHANGE THEN EXPENSES OF IMPROVEMENTS AND REPAIRS ARE CHARGED IMPROVEMENTS AND REPAIRS ARE CHARGED
TO PROFIT AND LOSS ACCOUNT.
TO PROFIT AND LOSS ACCOUNT.
AFTER THE IMPROVEMENT AND REPAIRS, AFTER THE IMPROVEMENT AND REPAIRS, EXPECTED FUTURE BENEFITS FROM FIXED EXPECTED FUTURE BENEFITS FROM FIXED ASSETS WILL INCREASE BEYOND THE ASSETS WILL INCREASE BEYOND THE PREVIOUSLY ASSESSED STANDARD PREVIOUSLY ASSESSED STANDARD PERFORMANCE THEN, EXPENSES ON PERFORMANCE THEN, EXPENSES ON IMPROVEMENTS AND REPAIRS ARE INCLUDED IMPROVEMENTS AND REPAIRS ARE INCLUDED
IN THE GROSS BOOK VALUE OF FIXED ASSET.
IN THE GROSS BOOK VALUE OF FIXED ASSET.
ADDITIONS OR EXTENSION OF ADDITIONS OR EXTENSION OF
CAPITAL NATURE TO AN CAPITAL NATURE TO AN
EXISTING ASSET EXISTING ASSET
IF INTEGRAL PART OF EXISTING IF INTEGRAL PART OF EXISTING ASSET IS GENERALLY ADDED ASSET IS GENERALLY ADDED GROSS BOOK VALUE OF GROSS BOOK VALUE OF
EXISTING ASSETS EXISTING ASSETS
IF SEPARATE IDENTITY AND IF SEPARATE IDENTITY AND CAPABLE TO BE USED AFTER CAPABLE TO BE USED AFTER THE DISPOSAL OF EXISTING THE DISPOSAL OF EXISTING ASSET IT IS ACCOUNTED ASSET IT IS ACCOUNTED
SEPERATELY.
SEPERATELY.
DISPOSAL OF FIXED DISPOSAL OF FIXED
ASSETS ASSETS
GAINS OR LOSSES ARISING ON GAINS OR LOSSES ARISING ON DISPOSAL ARE GENERALLY DISPOSAL ARE GENERALLY RECOGNIZED IN PROFIT AND LOSS RECOGNIZED IN PROFIT AND LOSS
ACCOUNT.
ACCOUNT.
WHENEVER PREVIOUSLY REVALUED WHENEVER PREVIOUSLY REVALUED FIXED ASSETS IS SOLD AND PROFIT FIXED ASSETS IS SOLD AND PROFIT HAS BEEN MADE THEN, PROFIT IS HAS BEEN MADE THEN, PROFIT IS CREDITED TO PROFIT AND LOSS CREDITED TO PROFIT AND LOSS
ACCOUNT.
ACCOUNT.
WHENEVER A PREVIOUSLY REVALUED WHENEVER A PREVIOUSLY REVALUED ASSET IS SOLD AND LOSS HAS BEEN ASSET IS SOLD AND LOSS HAS BEEN INCURRED THEN, THE LOSS SHOULD INCURRED THEN, THE LOSS SHOULD BE ADJUSTED AGAINST THE BALANCE BE ADJUSTED AGAINST THE BALANCE
OF REVALUATION RESERVE.
OF REVALUATION RESERVE.
RETIREMENT OF FIXED ASSET RETIREMENT OF FIXED ASSET
WHENEVER FIXED ASSETS ARE WHENEVER FIXED ASSETS ARE RETIRED FROM ACTIVE USE AND RETIRED FROM ACTIVE USE AND HELD FOR DISPOSAL THEN, SUCH HELD FOR DISPOSAL THEN, SUCH ASSET IS STATED AT THE LOWER ASSET IS STATED AT THE LOWER OF NET BOOK VALUE OR NET OF NET BOOK VALUE OR NET REALISABLE VALUE IN THE REALISABLE VALUE IN THE FINANCIAL STATEMENT.
FINANCIAL STATEMENT.
ANY ANY EXPECTED EXPECTED LOSS LOSS IS IS RECOGNIZED IMMEDIATELY IN THE RECOGNIZED IMMEDIATELY IN THE PROFIT AND LOSS STATEMENT.
PROFIT AND LOSS STATEMENT.
DISCLOSURE DISCLOSURE
GROSS AND NET BOOK VALUES OF FIXED GROSS AND NET BOOK VALUES OF FIXED ASSETS AT THE BEGINNING AND AT THE END ASSETS AT THE BEGINNING AND AT THE END OF ACCOUNTING PERIOD SHOWING OF ACCOUNTING PERIOD SHOWING ADDITIONS, DISPOSAL, ACQUISITION AND ADDITIONS, DISPOSAL, ACQUISITION AND
OTHER IMPROVEMENTS.
OTHER IMPROVEMENTS.
EXPENDITURE INCURRED ON ACCOUNT OF EXPENDITURE INCURRED ON ACCOUNT OF FIXED ASSETS IN THE COURSE OF FIXED ASSETS IN THE COURSE OF
CONSTRUCTION OR ACQUISITION.
CONSTRUCTION OR ACQUISITION.
REVALUED REVALUED AMOUNT AMOUNT SUBSTITUTED SUBSTITUTED FOR FOR HISTORICAL COST OF FIXED ASSETS, THE HISTORICAL COST OF FIXED ASSETS, THE METHOD ADOPTED TO COMPUTE THE METHOD ADOPTED TO COMPUTE THE REVALUED AMOUNT, AND WHETHER AN REVALUED AMOUNT, AND WHETHER AN EXTERNAL VALUER HAS VALUED THE FIXED EXTERNAL VALUER HAS VALUED THE FIXED ASSETS IN CASE WHERE FIXED ASSETS ARE ASSETS IN CASE WHERE FIXED ASSETS ARE
STATED AT REVALUED AMOUNT.
STATED AT REVALUED AMOUNT.
