In accounting, when one speaks of assets and valuations, the unique case of land always stands out. Land remains steadfast, unlike its counterparts—machinery, buildings, or vehicles, which bear the burden of time, wear, and tear. This immutable quality of land, where it doesn’t deteriorate with time or usage, renders it with what we term as …
Recognition The land is recognized as an asset when it is probable that the entity will receive future economic benefits from it, and the cost of the land can be reliably measured. The land cost comprises the purchase price, directly attributable costs to bring the land to its current location and condition, and estimated expenses …
Accounting For Land Revaluation: Increase and Decrease Revaluation. Read More »
Definition Residual value, often known as salvage value, is an asset’s projected scrap value by the completion of its lease or financial or valuable life. It shows the amount of value the asset’s owner will receive or assume to receive as the asset is ultimately dispositioned. The key task with the residual value conception is …
What Is the Residual Value of Fixed Assets and How to Calculate It Read More »
What are fixed assets? Fixed assets are owned by an entity with a useful life of more than one year and cannot be converted into cash or cash equivalent within one year. This group of assets is not reported as expenses when the entity purchases them. Yet, they report purchasing and other related costs on …
9 General Categories of Fixed Assets (With Explanation) Read More »
Definition: Net of fixed assets is the net of the gross value of fixed assets in the balance sheet after eliminating accumulated depreciation expenses, accumulated impairment expenses, and the debt or liabilities that the entity used to acquire fixed assets. The main idea behind the calculation of net fixed assets is that we want to …
What is Net of Fixed Asset? (Definition, Formula, List, and Example) Read More »
IAS 16 Property, Plant, and Equipment cover the accounting treatment for fixed assets. These assets include resources used by companies in the long term. Usually, companies acquire these assets to help support their operations. This process requires substantial capital investments in various resources. For the company, the process results in a cost or expense. However, …
Is Depreciation Part of Operating Expenses? (Yes, But Not All the Cases) Read More »
A business entity is a for-profit organization that performs different operations to earn profit. For effective operations, different resources are required by the company. For instance, money is a resource that a company uses to acquire supplies, raw materials, machinery, patents, etc., to maintain the continuity of business operations. The equipment, raw material, finished goods, …
Net Book Value Of Non-Current Assets: (Explanation, Calculation, Example) Read More »
A company’s balance sheet represents its financial health and position of it at a given time. Generally, a balance sheet is presently based on the accounting equation. It represents the assets owned by a business entity, liabilities owed, and the business’s equity. However, the classified balance sheet focuses on representing the assets and liabilities in …
Fixed Assets In The Balance Sheet: Classification, Recognition, Measurement Read More »
Overview Leasehold Improvement can be described as the changes that are made to the leased or rental property in order to ensure that it is best suited for the purposes of the tenant. During the course of the lease agreement, there might be a number of changes that the tenant requires in order to bring …
Leasehold Improvements: Accounting Treatment and Depreciation Read More »
Overview During the ordinary course of business, there are certain routine expenses that are considered unavoidable. They are part and parcel of the operations of the company, and therefore, need to be paid by the company in order to ensure that there are no bottlenecks that hinder the performance of the company. Repairs and maintenance …
Account for Repair and Maintenance Expense – Overview, Journal Entries, and Example Read More »
