Fixed Assets

Impairment Test – Definition, Explanation, Indicators, How to test the impairment, Examples, 6 Tips for impairment test

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 …

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Accounting for exploration costs

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 …

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Is Depreciation Expenses a Direct or Indirect Cost? (Explanation)

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 …

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