accounting standard 10

8/9/2019 Accounting Standard 10 ...

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AS-10


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INTRODUCTION

yAccounting Standard 10 Issued at 1985y Financial Statements disclose certain information

relating to Fixed assets. In many enterprises this Assetsare grouped into various categories, such as Land,

Building, Machinery, Vehicles, Furniture &Fittings,Goodwill, Patents, Trademarks etc.


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WHAT IS FIXED ASSETS ?

y Fixed assets are those assets which are purchase for thepurpose of operating the business and not for resale.

Example:- Land, Building, Machinery, Furniture etc.


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TYPES OF FIXED ASSETS

TANGI ASSETSEXAMPLE:-La , il i g a C ter etc.

INTANGI ALEASSETS

EXAMPLE:-Goodwill, Pate ts a dTrade ar s etc.


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SIGNIFICANCE OF FIXED ASSETS

y Fixed assets often comprise a significant portion

of total assets of enterprise and therefore areimportant in the presentation, assessment andevaluation of its financial position and strength.

y The determination of whether an expense

represents a fixed assets can have material effecton a companys reports as results of operations.


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VALUATION OF FIXED ASSETS

The ICAI has iss ed theAccountingStandard (AS-1 )

Accounting for ixedAssetswhichdefines fixed assets, sets outtheir significance, s ecifies the fixed assets excluded from itsscope coverage andprescri es the principles andnormsofstandards accounting treatment for various aspects of fixedassets valuation and accounting, i.e.., identification ,measurement, valuation, recognition, retirements anddisposals

anddisclosure requirement in financial statements preparedonhistorical cost asis including revaluation. Let us discus,understand and analysis these.


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STATEMENT DOES NOT DEALWITH

ACCOUNTING FOR THE FOLLOWING ITEMS :

- Forest, Plantation & similar regenerative Natural

resources- Wasting Assets including Oil, Natural gas etc

- Expenditure on Real Estate Development

- Live stock


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FIXED ASSETS OF SPECIAL TYPES

y Goodwill, in general, is recorded in the books onlywhen some consideration in money or moneys worth

has been paid for it.yWhenever a business is ac uired for a price which is in

excess of the value of the net assets of the businesstaken over, the excess is termed as goodwill.

y Goodwill arises from business connections, tradename or reputation of an enterprise or from otherintangible benefits enjoyed by an enterprise.


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EXAMPLE FOR VALUATION OF FIXED ASSETS :

y XYZ Ltd has certain Assets :

y Building Rs. 200000

y Plant & Machinery Rs. 100000y Furniture Rs. 80000

y Goodwill Rs. 50000

y Stock Rs. 65000

y Sundry Debtors Rs. 10000

y ash Rs. 54000

y Find out the Fixed Assets & Charge Depreciation


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Fixed Assets :-

y Building Rs. 200000

Less Dep. (10%) Rs. 20000Rs. 180000

* If the Dep. is not mentioned in the uestion weassumed the Dep. On Building would be 10% p.a as perAccounting Standard 6.


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Fixed Assets :-

y Plant & Machinery Rs. 100000

Less Dep. (15%) Rs. 15000Rs. 85000

* If the Dep. is not mentioned in the uestion weassumed the Dep. On Plant & Machinery would be15% p.a as perAccounting Standard 6.


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Fixed Assets :-

y Furniture Rs. 80000

Less Dep. (5%) Rs. 4000Rs. 76000

* If the Dep. is not mentioned in the uestion weassumed the Dep. On Furniture would be 5% p.a as perAccounting Standard 6.


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Fixed Assets :-

y

Goodwill is a Non Tangible Asset.

y No Depreciation is charged in Goodwill as perAccounting Standard 6.


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THANK YOU

y Kunal Kundu (A05)

y

Subhankar Dey (A13)y Subhamay Biswas (A14)

accounting standard 10

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