AS 10 does not apply to forest, plantation, wasting assets, expenses on real estate development, livestock, intangible assets, government grants or subsidies on assets, assets acquired under amalgamation.
Cost of fixed assets includes purchase price, delivery and handling, installation charges, and interest before commissioning.
Trial run expenses, excise duty and sales tax are also included in cost.
Assets acquired under barter should be recorded at fair market value of assets acquired or net book value of the assets given up.
Repair expenses on purchase of an old asset should be capitalized but in the case of an existing asset it should be charged to P & L Account unless it enhances performance.
Losses and gains on disposal are transferred to P & L Account.
In the case of assets acquired under higher purchase, although legal ownership is not available, it is capitalized at cash price.
When there are several assets at consolidated price, consideration is apportioned to various assets on a fair basis as determined by valuer.
In the case of revaluation, an entire class of assets should be revalued, rather than only a particular asset.
Revaluation should not result in net book value of the class being greater than the recoverable amount.
Accumulated depreciation existing on the date of revaluation should not be credited to P & L Account.
Revaluation profit is transferred to Revaluation Reserve, which cannot be used for dividend.
Decrease in net book value on revaluation should be charged to P & L Account. However, it may also be adjusted with earlier revaluation reserve.
The disclosure pertains to gross and net value of assets at the beginning and at the end, expenses incurred on acquisition, and revalued amount.
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