A fixed assets capitalization policy is an essential part of the accounting guidance system that works in the organization. Every company should devise a fixed assets capitalization policy to guide the accountants to work exactly as per the company’s requirements. Although accounting rules need to be followed, the management can maneuver the fixed asset capitalization […]
5 POINTS TO COVER IN FIXED ASSETS CAPITALIZATION POLICY Read More »
IAS 16 is the accounting standard that deals with property, plant, and equipment. There are numbers of items elements said in paragraph 16 of this standard that allows capitalizing as assets. Those items included: Its purchase price of fixed assets Import duties of assets and non-refundable purchase taxes. Discount and rebate should not take into
Capitalization of Dismantling Costs – Why Is It capitalized? Read More »
Introduction Business is the asset of every businessman and businesswoman, and the assets of the business are fixed assets and inventory. At the start of business studies, most students are confused about fixed assets and inventories. In actual business, there are clear differences in both of the terminologies. Here are the definitions and the differences
Inventories Vs. Fixed Assets: Why and What Are They Different? Read More »
Assets are the most important part of the business, without assets no one even thinks to start a business. Assets are the main thing which generates revenue and this revenue increase profit and results in the growth of the business from low to high level. Hence, in the business world, it is very important to
What Is the Difference Between Assets and Current Assets? Read More »
Fixed assets are the assets that are purchased for a longer period of time to be used and are not likely to be converted into cash in a short period of fewer than twelve months. Examples of fixed assets are land, building, and equipment, etc. The fixed assets are at risk of being misreported, which
What are the key internal controls for fixed assets? Read More »
No one can deny the importance of assets in the business world. Because assets create profit and also grow the business from a low to a high level. Assets have different types, but the most important are current and fixed assets. Fixed assets work for a long period of time, and current assets work in
Why Don’t We Depreciate Inventory? (Explained) Read More »
Introduction: The decrease in the value of an asset due to wear and tear is called depreciation. According to International Accounting standards, all the Fixed Assets should have an estimated useful life. And the firms should divide the cost of an asset on its life cycle. Accounting standards do not allow you to expense all
Adjusting Entries for Depreciation Expense Read More »
Overview: According to International Accounting Standards, the cost of a long-term asset should not be expense out in a single year profit & loss. It states that this cost should be capitalizing on its estimated useful life. The depreciation is an expense allowed to deduct from the company’s profit. This is a non-monetary expense. And
Accounting Entries for Depreciation Expenses (With Example) Read More »
Depreciation Rate: The rate or percentage at which the value of a fixed asset is depreciated using any method is called the depreciation rate. In other words, the depreciation rate is the rate that we use to charge fixed assets as depreciation expenses that report periodically in the income statement. The result value that comes
What is the Depreciation Rate and How to Determine it? Read More »
Depreciation reflects the pattern of the benefit flowing from the tangible asset(s) – property plant & equipment (PPE) – to the entity holding it. There are many types/categories of PPE like building, machinery, plant, equipment, fixtures, leasehold assets, vehicles. The deprecation begins when the asset is available for use as intended by management until the
How to Prepare a Depreciation Schedule? (Step by Step) Read More »