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AS 10 - Accounting For Fixed Assets (Property, Plant and Equipment) -…
AS 10 - Accounting For Fixed Assets (Property, Plant and Equipment)
- Definition: Assets intended for use in production or supply of goods/services, not for sale, expected to be used beyond one period.
- Land, buildings, machinery, furniture, computers, equipment.
- Regenerative natural resources, wasting assets, real estate development, livestock.
- Future economic benefits probable.
- Cost can be measured reliably.
- Historical Cost Components
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- Import duties and other non-refundable taxes
- Any directly attributable cost of bringing the asset for the working condition for its intended use (site preparation, delivery, installation, professional fees, start-up costs)
- Costs include direct and construction-related costs, minus internal profits.
- Non-similar assets: Record at fair market value of given or acquired asset.
- Similar assets: Record at fair market value or net book value of given up asset.
- Payment in shares: Use fair market value of asset or shares.
- Show at revalued price; restrict to “net recoverable amount”.
- Accounting for upward/downward revaluations.
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- Charge to P&L if no increase in future benefits.
- Add to gross value of fixed asset if future benefits increase.
- Remove from financial statements upon disposal or end of economic benefit.
- Recognize gain or loss in P&L.
- Gross and net value movements, additions, disposals, acquisitions.
- Construction or acquisition expenses.
- Method and external valuation of revalued fixed assets.