Definition: The impairment test is the testing procedure that is performed by the companies on the assets that they have to find out if the assets are impaired make the carrying value of assets in the reporting date less than the recoverable value of assets. For example, the company performs the impairment test on the …
Introduction: In the accounting world, the asset is defined as an owned resource from which future economic benefits are expected. On the balance sheet of any organization, be it a not-for-profit or for-profit, the carrying amount of all assets is reported. All such assets are divided into two categories on the balance sheet based on …
Fixed Assets Accounting for a Not-For-Profit Organization Read More »
Accounting depreciation Accounting depreciation is the use and tear and wears of tangible assets allocated by the company over the useful life of assets generally governed by corporate laws and accounting standards. The recognition of accounting depreciation is driven by accounting principles and standards such as US GAAP or IFRS or the country’s financial reporting …
Decommissioning costs Installation of fixed assets requires sincere work and incurs certain charges called commissioning costs for setting up and making a modification to the landscape for erecting the asset. Similarly, the decommissioning cost is the cost incurred by the companies to reverse modifications that were made in setting up in the landscape. This means …
Meaning Exploration costs mean the cost incurred for the search of mineral resources including minerals, oils, natural gas, and other similar non-regenerative resources after the entity has obtained the rights to explore in specific areas by determining technical feasibility and commercial viability of extracting the mineral resource. (adapted from IFRS 6). IFRS 6 allows the …
Meaning A tenant should recognize restoration cost as part of the right of use asset while incurring obligation for them. Based on the circumstances, this shall be decided that it may start at the commencement date or be a consequence of having used the asset for a particular period. The obligation is covered under IAS …
Accounting for restoration costs (Journal Entries and Explanation) Read More »
Depreciation IAS 16 defines depreciation as ‘the systematic allocation of the depreciable amount of an asset over its useful life. The depreciable amount equals the purchase cost of the asset less the salvage value or other amount like the revaluation amount of the asset. Depreciation amounts to distributing the cost of assets to the income …
Is Depreciation Expense An Implicit Cost? (Explained) Read More »
Depreciation IAS 16 defines depreciation as the systematic allocation of the depreciable amount of an asset over its useful life. The depreciable amount equals the purchase cost of the asset less the salvage value or other amount like the revaluation amount of the asset. Depreciation amounts to distributing the cost of assets to the income …
Is Depreciation Expenses an Overhead Cost? (Explanation) Read More »
Depreciation IAS 16 defines depreciation as the systematic allocation of the depreciable amount of an asset over its useful life. The depreciable amount equals the purchase cost of the asset less the salvage value or other amount like the revaluation amount of the asset. Depreciation amounts to distributing the cost of assets to the income …
Is Depreciation Expense an Operating Expense? (Explanation) Read More »
Depreciation Depreciation is a non-cash operating activity resulting from wear and tear in the use of assets. Still, it has been quantified by using accounting principles and assumptions in line with the enterprise’s own accounting policies. The amount of depreciation needs to be calculated each year and is debited to the income statement like any …
Is Depreciation Expenses a Direct or Indirect Cost? (Explanation) Read More »
