2. ACCOUNTING FOR FIXED ASSETS (AS-10)
• Fixed Assets:
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.
• Examples:-
• Land
• Building
• Plant and Machinery
• Furniture etc.
3. ACCOUNTING FOR FIXED ASSETS (AS-10)
• 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.
• Expenditure on real estate development.
• Live stock.
4. ACCOUNTING FOR FIXED ASSETS (AS-10)
Fixed assets in financial statement:-
Fixed assets shall be shown in financial
statement by two ways:-
1.- Historical Cost
2.- Revalued Price
5. Historical Cost:
The historical cost of acquired fixed
assets consists of the following
Purchase price Import duties and other
non-refundable taxes
Any directly attributable cost of bringing
the asset to the working condition for its
intended use like.
6. Revalued Price:
When a fixed asset is revalued, an entire class of assets
should be revalued or the selection of assets for revaluation
should be made on a systematic basis.
There are two methods of showing the
revalued amount in the financial statement.
By re-stating the gross book value and accumulated
depreciation.
By re-stating net book value adding there in the net
increase on account of revaluation.
7. Intangible assets
Are rights, privileges, and competitive advantages that
result from the ownership of long-lived assets that do not
possess physical substance. Evidence of intangibles may
exist in the form of contracts or licenses.
1. Patents, copyrights, and trademarks.
2. Acquisition of another business, in which the
purchase price includes a payment for the company's
favorable attributes (called goodwill).
8. Patent
A patent is an exclusive right issued by the
U.S. Patent Office that enables the recipient to
manufacture, sell, or otherwise control an
invention for a period of
20 years from the date
of the grant. A patent
is nonrenewable.
9. Trademark
They also generally enhance the sale of
the product. The creator or original user
may obtain exclusive legal right to the
trademark or trade name by registering it
with the U.S. Patent Office.
10. Goodwill
• . Goodwill represents the value of all
favorable attributes that relate to a company.
These include exceptional management,
desirable location, good customer relations,
skilled employees, high-quality products
