Accounting Standard 10: Accounting for Fixed Assets

1616 Words Sep 8th, 2012 7 Pages
Accounting Standard 10: Accounting for Fixed Assets

• Fixed asset is an asset held for producing or providing goods and/or services and is not held for sale in the normal course of the business.
• Cost to include purchase price and attributable costs of bringing asset to its working condition for the intended use. It includes financing cost for period up to the date of readiness for use.
• Self-constructed assets are to be capitalised at costs that are specifically related to the asset and those which are allocable to the specific asset.
• Fixed asset acquired in exchange or part exchange should be recorded at fair market value or net book value of asset given up adjusted for balancing payment, cash receipt etc. Fair market value is
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• For incorporation of non integral foreign operation, both monetary and non monetary assets and liabilities should be translated at the closing rate as on the balance sheet date. The income and expenses should be translated at the exchange rates at the date of transactions. The resulting exchange differences should be accumulated in the foreign currency translation reserve until the disposal of net investment. Any goodwill or capital reserve on acquisition on non-integral financial operation is translated at the closing rate.
• In Consolidated Financial Statement (CFS) of the reporting enterprise, exchange difference arising on intra group monetary items continues to be recognized as income or expense, unless the same is in substance an enterprise’s net investment in non integral foreign operation.
• When the financial statements of non integral foreign operations of a different date are used for CFS of the reporting enterprise, the assets and liabilities are translated at the exchange rate prevailing on the balance sheet date of the non integral foreign operations. Further adjustments are to be made for significant movements in exchange rates upto the balance sheet date of the reporting currency.
• When there is a change in the classification of a foreign operation from integral to non integral or vice versa the translation procedures