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, …
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 »
Overview: Building Improvement tends to be a major expense for organizations, as well as for private investors because they require a significant amount of finance to be invested in a line with the expense. In this regard, it is also important to properly categorize building, and building improvements so that there is clarity regarding the …
Building Improvement: Accounting, Journal entries, Depreciation Read More »
Definition Fictitious assets can be defined as fake assets, which are normally used to record assets that do not have physical substance. They do not have a physical presence, and hence, these assets are not really assets in the true sense. Still, they are defined as assets mainly categorized as huge expenses or losses that …
Fictitious Assets: Definition, Example, and List Read More »
Fixed assets represent long-term assets used by companies and businesses in the generation of revenues and profits. There are several types of fixed assets that companies use, including property, plant, and equipment. Since most of these assets require high-value investments, accounting standards require companies not to charge the cost of these assets in a single …
Land Improvements: Depreciation, and How To Account For It Read More »
When a company or business acquires an asset, it records it in its financial statements at cost. After every accounting period, the company must also calculate and record a depreciation or amortization charge related to the asset. Sometimes, however, companies must recognize an impairment against the asset under various circumstances as well. What is the …
Impairment of Assets – What Is It and What Causes of Impairment? Read More »
What is goodwill? Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually recognized and separately identified. It is recorded and recognized in the balance sheet as long-term assets when a company purchases another company and owns more than 50% of shares. How …
The impairment test for goodwill – How to perform an impairment test? Read More »
