Accounting Standard on Fixed Assest



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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