Definition Fictitious assets can be defined as 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 occur …
Whare is the Fictitious Asset?: 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 »
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. The carrying amount of all assets is reported on any organization’s balance sheet, be it a not-for-profit or for-profit. All such assets are divided into two categories on the balance sheet based on how quickly …
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 »
