Accounting Standard on Fixed Assest

ACCOUNTING FOR FIXED  ASSETS (AS-10)

 

1.  Fixed assets shall be shown in financial statements at historical cost less depreciation.

 

2.  What is  Historical cost:  The historical cost consists of the following:

 

a.  Purchase price.

b.  Import duties and other non-refundable taxes.

 

c.                                     Cost of bringing the asset to the working condition like: Site preparation, Delivery cost, Installation cost, Expenditure incurred on test runs less  income by sale of products, Administrative                 overheads           specifically           attributable      for                                  construction/ acquisition/installation.

d.  Reduce Govt. grants received/receivable against fixed assets. e.  Price adjustments, changes in duties etc.

3.  Self – Constructed  Assets: Cost of self-constructed assets shall not include any internal profit.

 

4.  Accounting treatment of first  time Revaluation:

 

a.  Upward: Increase in net book value is credited to „Revaluation Reserve‟.

 

b.  Downward: Decrease in net book value is charged to the profit & loss account.

 

5.  Accounting for   subsequent  revaluation (Upward/Downward):

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