However, the machinery spares that can be used in connection with more than one item of fixed asset are of the nature of maintenance spares and not of the nature of capital spares. How to become a pathologist with top hospitals in India Are you looking for a career in medicine as a clinical pathologist?
Items such as spare parts, stand-by equipment and servicing equipment are recognized in accordance with this Standard when they meet the definition of property, plant and equipment. Replacements Parts of some items of property, plant and equipment may require replacement at regular intervals.
It will include spares which are proprietary in nature. Also Read Notes on: An upward revaluation does not provide a basis for crediting to the profit and loss statement the accumulated depreciation existing at the date of revaluation.
In case of jointly held assets, either the original cost, accumulated depreciation or WDV should be recorded Accounting standard 10 accounting for fixed the balance sheet in the proportion of right to use or utilise the asset.
The querist has stated that different companies adopt different methods for dealing with machinery spares. Presently, machinery spares have been included in inventories without being written off over the life period of principal item.
Do you want to control your anger? Disclosure — Accounting Standard Material items retired from active use and held for disposal should be stated at the lower of their net book value and net realisable value and shown separately in the financial statements.
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 acquired on hire purchase terms should be recorded at their cash value, which, if not readily available, should be calculated by assuming an appropriate rate of interest.
Such spares will also include spares of the nature of stand-by equipment. However, if such spares can be used only in connection with an item of fixed asset and their use is expected to be irregular, it may be appropriate to allocate the total cost on a systematic basis over a period not exceeding the useful life of the principal item.
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. Accounting treatment of revaluation under different situation: This statement does not deal with the treatment of government grants and subsidies, and assets under leasing rights.
They should be shown in the balance sheet with an appropriate narration to indicate that the enterprise does not have full ownership thereof. Therefore, it is obligatory to capitalise machinery spares which are of the nature of capital spares as explained in paragraph 13 above.
An enterprise may decide to expense an item which could otherwise have been included as fixed asset, because the amount of the expenditure is not material.
The cost of an item of property, plant and equipment should be recognized as an asset if, and only if: When a fixed asset is acquired in exchange or in part 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 asset given up, adjusted for any balancing payment or receipt of cash or other consideration.The following is the text of the Accounting Standard (AS) 10 issued by the Institute of Chartered Accountants of India on ‘Accounting for Fixed.
Accounting Standard Accounting for Fixed Assets • Fixed asset is an asset held for producing or providing goods and/or services and is not held for sale in the normal course of the business.
Nov 01, · Accounting Standard (AS) 10 (issued ) Accounting for FixedAssets (This Accounting Standard includes paragraphs set in bold italic type and paragraphs set in plain type, which have equal authority.
Paragraphs in bold italic type indicate the main principles. This Accounting Standard should be read in the context of the Preface to the Statements of Accounting. Feb 08, · Accounting Standard (AS) 10 Accounting for Fixed Assets (This Accounting Standard includes paragraphs set in bold italic type and paragraphs set in plain type, which have equal authority.
Paragraphs in bold italic type indicate the main principles. This Accounting Standard should be read in the context of the Preface to the Statements of Accounting Standards1.). ACCOUNTING FOR FIXED ASSESTS (AS) Applicability: This accounting standard is not applicable for the following items:Forests, Plantations, and similar regenerative resources.
Wasting assets like minerals, oil, and natural gas. Accounting Standard Accounting for Fixed Assets Words Sep 8th, 7 Pages • Fixed asset is an asset held for producing or providing goods and/or services and is not held for sale in the normal course of the business.Download