- The document provides guidance on accounting for depreciation of assets. It defines key terms like depreciation, depreciable assets, useful life, and depreciable amount.
- It discusses factors to consider in determining depreciation charges like historical cost, useful life, and residual value of assets. It also describes common depreciation methods and disclosure requirements.
- The standard specifies that depreciation should be allocated systematically over an asset's useful life and the method used should be consistent and changed only under certain conditions. It provides guidance on estimating useful lives and accounting for changes in estimates.
This document provides guidance on accounting standards for depreciation accounting. It defines key terms like depreciation, depreciable assets, useful life, and depreciable amount. It explains factors to consider in assessing depreciation such as historical cost, useful life, and residual value of assets. It discusses different methods for allocating depreciation over an asset's useful life, and notes that management selects the most appropriate method based on factors like asset type and use. The standard is mandatory for accounting periods beginning on or after April 1, 1995.
This document outlines accounting standards regarding depreciation accounting. It defines key terms like depreciation, depreciable assets, useful life, and depreciable amount. It explains that depreciation is based on historical cost, useful life, and residual value. It discusses factors that determine useful life and methods for allocating depreciation over useful life, like the straight-line method. It also covers disclosure requirements and treatment when the depreciation method is changed.
This document summarizes the key points of the Accounting Standard (AS) 6 on depreciation accounting issued by the Institute of Chartered Accountants of India. It defines depreciation as the wearing out or loss of value of an asset due to use, time, or obsolescence. It outlines factors to consider in determining depreciation such as historical cost, useful life, and residual value of assets. Common depreciation methods like straight-line and reducing balance are discussed. Disclosure requirements for depreciation policies, calculations, and any changes are also covered.
This document outlines accounting standards for classifying and disclosing items in a statement of profit and loss. It defines key terms like ordinary activities, extraordinary items, and prior period items. It provides guidance on classifying items as profit/loss from ordinary activities, extraordinary items, or prior period items. It also addresses accounting for changes in estimates and policies, requiring disclosure of material changes and their effects.
How to evaluate Oil and Gas Company’s Performance & Stock InvestmentHamdy Rashed
1) Reserves measurements impact financial statements such as DD&A, revenue, costs and impairment. Disclosure of reserves is important for internal and external users but there are differences between GAAPs.
2) Various ratios such as reserve replacement, reserve life and finding cost are used to evaluate performance and efficiency. Reserves also impact stock price and investment decisions.
3) Fair value of assets and stocks consider disclosures like standardized measure of discounted future cash flows from proved reserves under different GAAPs. Various ratios also help investors compare companies.
This document provides an overview and summary of MFRS 133 Earnings per Share. It discusses the following key points:
- MFRS 133 is equivalent to IAS 33 Earnings per Share and was issued by the Malaysian Accounting Standards Board in November 2011.
- The standard provides guidance on calculating and presenting both basic and diluted earnings per share amounts.
- Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
- Diluted EPS is calculated similarly but adjusts the profit or loss and shares for all dilutive potential ordinary shares.
- The standard defines key terms used and provides guidance on calculating earnings
Petroleum accounting for tangible and intangible costsHamdy Rashed
1) Tangible drilling costs such as casing, tubing, and wellheads installed in exploratory wells should be capitalized temporarily until reserves are determined. If reserves are found, they become long-term assets; if not, they are expensed.
2) Development well tangible costs are capitalized regardless of the outcome. Support equipment used for multiple wells are also capitalized as long-term assets and depreciated over their useful lives.
3) Drilling materials purchases can be directly expensed to well costs or stored as inventory. Direct expensing is preferred if materials needs are relatively stable and lead times are reasonable.
This document provides guidance on accounting standards for depreciation accounting. It defines key terms like depreciation, depreciable assets, useful life, and depreciable amount. It explains factors to consider in assessing depreciation such as historical cost, useful life, and residual value of assets. It discusses different methods for allocating depreciation over an asset's useful life, and notes that management selects the most appropriate method based on factors like asset type and use. The standard is mandatory for accounting periods beginning on or after April 1, 1995.
This document outlines accounting standards regarding depreciation accounting. It defines key terms like depreciation, depreciable assets, useful life, and depreciable amount. It explains that depreciation is based on historical cost, useful life, and residual value. It discusses factors that determine useful life and methods for allocating depreciation over useful life, like the straight-line method. It also covers disclosure requirements and treatment when the depreciation method is changed.
This document summarizes the key points of the Accounting Standard (AS) 6 on depreciation accounting issued by the Institute of Chartered Accountants of India. It defines depreciation as the wearing out or loss of value of an asset due to use, time, or obsolescence. It outlines factors to consider in determining depreciation such as historical cost, useful life, and residual value of assets. Common depreciation methods like straight-line and reducing balance are discussed. Disclosure requirements for depreciation policies, calculations, and any changes are also covered.
This document outlines accounting standards for classifying and disclosing items in a statement of profit and loss. It defines key terms like ordinary activities, extraordinary items, and prior period items. It provides guidance on classifying items as profit/loss from ordinary activities, extraordinary items, or prior period items. It also addresses accounting for changes in estimates and policies, requiring disclosure of material changes and their effects.
How to evaluate Oil and Gas Company’s Performance & Stock InvestmentHamdy Rashed
1) Reserves measurements impact financial statements such as DD&A, revenue, costs and impairment. Disclosure of reserves is important for internal and external users but there are differences between GAAPs.
2) Various ratios such as reserve replacement, reserve life and finding cost are used to evaluate performance and efficiency. Reserves also impact stock price and investment decisions.
3) Fair value of assets and stocks consider disclosures like standardized measure of discounted future cash flows from proved reserves under different GAAPs. Various ratios also help investors compare companies.
This document provides an overview and summary of MFRS 133 Earnings per Share. It discusses the following key points:
- MFRS 133 is equivalent to IAS 33 Earnings per Share and was issued by the Malaysian Accounting Standards Board in November 2011.
- The standard provides guidance on calculating and presenting both basic and diluted earnings per share amounts.
- Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
- Diluted EPS is calculated similarly but adjusts the profit or loss and shares for all dilutive potential ordinary shares.
- The standard defines key terms used and provides guidance on calculating earnings
Petroleum accounting for tangible and intangible costsHamdy Rashed
1) Tangible drilling costs such as casing, tubing, and wellheads installed in exploratory wells should be capitalized temporarily until reserves are determined. If reserves are found, they become long-term assets; if not, they are expensed.
2) Development well tangible costs are capitalized regardless of the outcome. Support equipment used for multiple wells are also capitalized as long-term assets and depreciated over their useful lives.
3) Drilling materials purchases can be directly expensed to well costs or stored as inventory. Direct expensing is preferred if materials needs are relatively stable and lead times are reasonable.
Accounting standards are written policies that provide guidance on recognizing, measuring, presenting, and disclosing accounting transactions and events. They aim to standardize accounting policies and financial statement disclosures to improve reliability and comparability. India has 32 accounting standards issued by ICAI that are largely based on International Financial Reporting Standards and cover topics like revenue recognition, investments, employee benefits, and intangible assets.
Rodel S. Navarro Business and Management Consultant and Director RODEL SY NAVARRO BUSINESS CONSULTANCY SERVICES (RSNBCS) Tel / Mobile: +63-0917-7333563 Email: rsnbcs@gmail.com http://www.slideshare.net/RSNBCS (About Business Laws compilation): http://www.slideshare.net/BUSINESSLAWSPH Email: businesslawsph@gmail.com
This document discusses company law reform in Hong Kong. It summarizes the work done by the Companies Registry and Standing Committee on Company Law Reform to reform company law and corporate governance, including an overall review of the Companies Ordinance, a corporate governance review, and a review of accounting provisions. Key reforms implemented include amendments to introduce one member/one director companies, remove directors by ordinary resolution, and provide indemnities and insurance for directors. A rewrite of the Companies Ordinance is also discussed to address problems with its structure, length, and outdated concepts.
Rodel S. Navarro Business and Management Consultant and Director RODEL SY NAVARRO BUSINESS CONSULTANCY SERVICES (RSNBCS) Tel / Mobile: +63-0917-7333563 Email: rsnbcs@gmail.com http://www.slideshare.net/RSNBCS (About Business Laws compilation): http://www.slideshare.net/BUSINESSLAWSPH Email: businesslawsph@gmail.com
Petroleum cost in petroleum upstream industry p1Hamdy Rashed
This document discusses accounting for acquisition, exploration, development, and decommissioning costs for oil and gas companies under GAAP, IFRS, and production sharing contracts. It outlines criteria for capitalizing versus expensing various costs such as acquisition costs, exploration well costs, development well costs, operating costs, and decommissioning costs. It also discusses treatment of costs related to incremental drilling depth, appraisal wells, and delineation of proved versus unproved reserves areas. Technical information and production sharing contract terms are important to properly classify costs as capital or expense.
The document discusses accounting standards and provides details about their objectives, issuance, and application. The key points are:
- Accounting standards aim to standardize accounting policies and financial statement presentation to facilitate comparison across firms.
- The Institute of Chartered Accountants of India issues accounting standards that must be followed in preparing financial statements under the Companies Act.
- Over 30 accounting standards have been issued so far covering various aspects of recognition, measurement, treatment and disclosure of transactions and events.
- Compliance with accounting standards brings uniformity and enhances the quality and transparency of financial reporting.
This document provides notes to the consolidated financial statements of Anheuser-Busch Companies and Subsidiaries. It summarizes the company's significant accounting policies, including principles of consolidation, revenue recognition, foreign currency translation, valuation of securities, cash, inventories, fixed assets, intangible assets, delivery costs, advertising costs, financial derivatives, stock-based compensation, and income taxes. The notes also provide details on the composition of certain financial statement line items such as plant and equipment, changes in intangible assets, and the pro forma impact of expensing stock options.
C:\Fakepath\Isa 800 Special Considerations—Audits Of Financial Statements Pre...guest4a971d
- The document provides international standards on auditing special purpose financial statements prepared under a special purpose framework.
- It outlines requirements for accepting the engagement, planning and performing the audit, and forming an opinion and reporting considerations.
- Appendices include examples of auditor's reports on special purpose financial statements prepared for a tax basis, regulatory compliance, and contractual compliance.
International Accounting Standard 2 (IAS 2) establishes the accounting treatment for inventories. The key points covered in the document are:
- Inventories must be measured at the lower of cost or net realizable value. Cost includes all costs to bring the inventory to its present location and condition.
- Common costing methods like FIFO and weighted average can be used if they approximate actual cost. Inventories should be written down if the net realizable value falls below cost.
- Disclosures around inventories, costing methods used, and write-downs to net realizable value are required.
The document provides an overview of accounting standards in India. It discusses the background and authority of accounting standards set by the Institute of Chartered Accountants of India (ICAI). It also summarizes key compliance standards such as AS-2 on valuation of inventories, AS-6 on accounting for depreciation, and AS-9 on revenue recognition. Additionally, it covers reporting standards including AS-3 on cash flow statements, AS-13 on accounting for investments, and AS-18 on related party disclosures.
The document discusses accounting standards and International Financial Reporting Standards (IFRS). It provides an overview of 32 accounting standards (AS) issued by the Institute of Chartered Accountants of India (ICAI) that provide guidelines for accounting treatments and disclosures. It also summarizes 21 International Accounting Standards (IAS) issued by the International Accounting Standards Board (IASB). The goals of accounting standards and IFRS are to harmonize accounting policies, eliminate non-comparability, improve reliability of financial statements, and ensure transparency and consistency for the benefit of the economy, investors, industry and accounting professionals.
Accounting standards with reference to Genting Lanco Power (India) Pvt.Ltd. kimi7792
The document discusses accounting standards in India issued by the Institute of Chartered Accountants of India (ICAI). It provides details on three key standards - AS 1 on disclosure of accounting policies, AS 2 on valuation of inventories, and AS 10 on accounting for fixed assets. For each standard, it outlines the objectives, relevant definitions, valuation methods, disclosure requirements, and other guidelines specified in the standards. It also includes an example balance sheet from Genting Lanco Power (India) Pvt. Ltd. as of March 31, 2014.
- The document defines terms related to accounting for tangible fixed assets such as historical cost, depreciation, useful life, and liquidation value.
- To be recognized as a tangible fixed asset, an asset must meet four criteria: provide future economic benefits, have a reliably determined historical cost, have an estimated useful life of over one year, and meet value criteria under current regulations.
- Tangible fixed assets are classified into groups like buildings, machinery, vehicles, and more based on their nature and use. Their recognition as assets or expenses affects financial reporting.
This document outlines accounting standards for intangible fixed assets in Vietnam. It defines key terms like intangible fixed assets, research, development, historical cost, and useful life. It provides guidance on recognizing and determining the initial value of intangible assets, including those purchased separately, through business mergers, allocated by the state, or created internally. Costs are to be capitalized for intangible assets that meet the definition and recognition criteria, while costs incurred in the research stage of internal projects are expensed. The document provides detailed rules for classifying and recording various types of intangible assets.
This document summarizes the history and development of IFRS 3, the standard on accounting for business combinations:
1. IFRS 3 was first adopted in 2001 and has undergone several revisions since then to improve guidance and converge with US GAAP standards. The most recent revision was issued in 2008.
2. IFRS 3 establishes principles for how an acquirer must recognize and measure the identifiable assets acquired, liabilities assumed, and any non-controlling interest in a business combination. It also provides guidance on recognizing and measuring goodwill or gain from a bargain purchase.
3. IFRS 3 requires all business combinations to be accounted for using the acquisition method, whereby the acquirer recognizes and
This document discusses Nu Skin, an anti-aging company projected to be a $1 trillion industry by 2025. It outlines Nu Skin's innovative anti-aging skincare and nutrition products, scientific collaborations, record-setting product launches, global growth, and social business model. Distributors can earn commissions averaging over $100,000 with an optional starter package as low as $200 to become a distributor.
Accounting standards are written policies that provide guidance on recognizing, measuring, presenting, and disclosing accounting transactions and events. They aim to standardize accounting policies and financial statement disclosures to improve reliability and comparability. India has 32 accounting standards issued by ICAI that are largely based on International Financial Reporting Standards and cover topics like revenue recognition, investments, employee benefits, and intangible assets.
Rodel S. Navarro Business and Management Consultant and Director RODEL SY NAVARRO BUSINESS CONSULTANCY SERVICES (RSNBCS) Tel / Mobile: +63-0917-7333563 Email: rsnbcs@gmail.com http://www.slideshare.net/RSNBCS (About Business Laws compilation): http://www.slideshare.net/BUSINESSLAWSPH Email: businesslawsph@gmail.com
This document discusses company law reform in Hong Kong. It summarizes the work done by the Companies Registry and Standing Committee on Company Law Reform to reform company law and corporate governance, including an overall review of the Companies Ordinance, a corporate governance review, and a review of accounting provisions. Key reforms implemented include amendments to introduce one member/one director companies, remove directors by ordinary resolution, and provide indemnities and insurance for directors. A rewrite of the Companies Ordinance is also discussed to address problems with its structure, length, and outdated concepts.
Rodel S. Navarro Business and Management Consultant and Director RODEL SY NAVARRO BUSINESS CONSULTANCY SERVICES (RSNBCS) Tel / Mobile: +63-0917-7333563 Email: rsnbcs@gmail.com http://www.slideshare.net/RSNBCS (About Business Laws compilation): http://www.slideshare.net/BUSINESSLAWSPH Email: businesslawsph@gmail.com
Petroleum cost in petroleum upstream industry p1Hamdy Rashed
This document discusses accounting for acquisition, exploration, development, and decommissioning costs for oil and gas companies under GAAP, IFRS, and production sharing contracts. It outlines criteria for capitalizing versus expensing various costs such as acquisition costs, exploration well costs, development well costs, operating costs, and decommissioning costs. It also discusses treatment of costs related to incremental drilling depth, appraisal wells, and delineation of proved versus unproved reserves areas. Technical information and production sharing contract terms are important to properly classify costs as capital or expense.
The document discusses accounting standards and provides details about their objectives, issuance, and application. The key points are:
- Accounting standards aim to standardize accounting policies and financial statement presentation to facilitate comparison across firms.
- The Institute of Chartered Accountants of India issues accounting standards that must be followed in preparing financial statements under the Companies Act.
- Over 30 accounting standards have been issued so far covering various aspects of recognition, measurement, treatment and disclosure of transactions and events.
- Compliance with accounting standards brings uniformity and enhances the quality and transparency of financial reporting.
This document provides notes to the consolidated financial statements of Anheuser-Busch Companies and Subsidiaries. It summarizes the company's significant accounting policies, including principles of consolidation, revenue recognition, foreign currency translation, valuation of securities, cash, inventories, fixed assets, intangible assets, delivery costs, advertising costs, financial derivatives, stock-based compensation, and income taxes. The notes also provide details on the composition of certain financial statement line items such as plant and equipment, changes in intangible assets, and the pro forma impact of expensing stock options.
C:\Fakepath\Isa 800 Special Considerations—Audits Of Financial Statements Pre...guest4a971d
- The document provides international standards on auditing special purpose financial statements prepared under a special purpose framework.
- It outlines requirements for accepting the engagement, planning and performing the audit, and forming an opinion and reporting considerations.
- Appendices include examples of auditor's reports on special purpose financial statements prepared for a tax basis, regulatory compliance, and contractual compliance.
International Accounting Standard 2 (IAS 2) establishes the accounting treatment for inventories. The key points covered in the document are:
- Inventories must be measured at the lower of cost or net realizable value. Cost includes all costs to bring the inventory to its present location and condition.
- Common costing methods like FIFO and weighted average can be used if they approximate actual cost. Inventories should be written down if the net realizable value falls below cost.
- Disclosures around inventories, costing methods used, and write-downs to net realizable value are required.
The document provides an overview of accounting standards in India. It discusses the background and authority of accounting standards set by the Institute of Chartered Accountants of India (ICAI). It also summarizes key compliance standards such as AS-2 on valuation of inventories, AS-6 on accounting for depreciation, and AS-9 on revenue recognition. Additionally, it covers reporting standards including AS-3 on cash flow statements, AS-13 on accounting for investments, and AS-18 on related party disclosures.
The document discusses accounting standards and International Financial Reporting Standards (IFRS). It provides an overview of 32 accounting standards (AS) issued by the Institute of Chartered Accountants of India (ICAI) that provide guidelines for accounting treatments and disclosures. It also summarizes 21 International Accounting Standards (IAS) issued by the International Accounting Standards Board (IASB). The goals of accounting standards and IFRS are to harmonize accounting policies, eliminate non-comparability, improve reliability of financial statements, and ensure transparency and consistency for the benefit of the economy, investors, industry and accounting professionals.
Accounting standards with reference to Genting Lanco Power (India) Pvt.Ltd. kimi7792
The document discusses accounting standards in India issued by the Institute of Chartered Accountants of India (ICAI). It provides details on three key standards - AS 1 on disclosure of accounting policies, AS 2 on valuation of inventories, and AS 10 on accounting for fixed assets. For each standard, it outlines the objectives, relevant definitions, valuation methods, disclosure requirements, and other guidelines specified in the standards. It also includes an example balance sheet from Genting Lanco Power (India) Pvt. Ltd. as of March 31, 2014.
- The document defines terms related to accounting for tangible fixed assets such as historical cost, depreciation, useful life, and liquidation value.
- To be recognized as a tangible fixed asset, an asset must meet four criteria: provide future economic benefits, have a reliably determined historical cost, have an estimated useful life of over one year, and meet value criteria under current regulations.
- Tangible fixed assets are classified into groups like buildings, machinery, vehicles, and more based on their nature and use. Their recognition as assets or expenses affects financial reporting.
This document outlines accounting standards for intangible fixed assets in Vietnam. It defines key terms like intangible fixed assets, research, development, historical cost, and useful life. It provides guidance on recognizing and determining the initial value of intangible assets, including those purchased separately, through business mergers, allocated by the state, or created internally. Costs are to be capitalized for intangible assets that meet the definition and recognition criteria, while costs incurred in the research stage of internal projects are expensed. The document provides detailed rules for classifying and recording various types of intangible assets.
This document summarizes the history and development of IFRS 3, the standard on accounting for business combinations:
1. IFRS 3 was first adopted in 2001 and has undergone several revisions since then to improve guidance and converge with US GAAP standards. The most recent revision was issued in 2008.
2. IFRS 3 establishes principles for how an acquirer must recognize and measure the identifiable assets acquired, liabilities assumed, and any non-controlling interest in a business combination. It also provides guidance on recognizing and measuring goodwill or gain from a bargain purchase.
3. IFRS 3 requires all business combinations to be accounted for using the acquisition method, whereby the acquirer recognizes and
This document discusses Nu Skin, an anti-aging company projected to be a $1 trillion industry by 2025. It outlines Nu Skin's innovative anti-aging skincare and nutrition products, scientific collaborations, record-setting product launches, global growth, and social business model. Distributors can earn commissions averaging over $100,000 with an optional starter package as low as $200 to become a distributor.
Mr. Razali is a former student of GYSS who now works as a teacher. He enjoys games and music in his free time. He shares some facts about himself and his family. The document then outlines Mr. Razali's seven rules for students, which focus on respect, listening skills, behavior, punctuality, responsibility, cleanliness, and following the school handbook. The rules are meant to create a fun learning environment.
This document provides information about planning a study trip to Vancouver, Canada focused on entrepreneurship. It summarizes key details about Vancouver, including that it is a welcoming, cosmopolitan city with a thriving business environment. Several quotes praise Vancouver's natural beauty, climate, and culture. The document then outlines potential activities for the study trip, including visiting Olympic sites, outdoor activities, downtown areas, universities, and local startups and companies. It highlights Vancouver's diverse workforce and key industries such as digital media, film, technology, and sustainability. The document aims to provide inspiration for planning an entrepreneurially-focused study trip experience in Vancouver.
The document provides instructions for creating a paper box called an "EleBox" through a multi-step folding process. Students are instructed to carefully cut out the box outline, score the dotted lines, apply glue where indicated, and fold along the scored lines to form the completed box. The activity aims to teach basic paper crafting and 3D modeling skills through hands-on creation of a simple yet engaging paper structure.
The document discusses developing ideas and concepts through combining different objects. It introduces a Polish surrealist painter as an influence and provides examples of combining two items, such as a tuba and elephant, to form a new creation like a "Tubaphant". The activities encourage combining two given items or choosing your own items to combine and drawing the new object that results from the combination.
Este documento contiene una lista de 376 canciones de diferentes artistas. La lista incluye títulos de canciones populares de géneros como pop, rock, baladas y música latina de artistas como ABBA, Aerosmith, Alejandro Sanz, Amanda Miguel, Alvaro Torres y muchos otros.
This document outlines accounting standards for depreciation accounting. It defines key terms like depreciation, depreciable assets, useful life, and depreciable amount. It discusses factors that determine depreciation charges like historical cost, useful life, and residual value. Common depreciation methods like straight-line and reducing balance are described. The standard also addresses disclosure requirements and changes to depreciation methods.
This document provides summaries of Accounting Standards (AS) 1 through 10 in India.
AS 1 requires disclosure of significant accounting policies. AS 2 deals with determining the value of inventories. AS 3 requires classification of cash flows into operating, investing and financing activities. AS 4 addresses contingencies and post-balance sheet events. AS 5 specifies classification and disclosure of extraordinary/prior period items and accounting policy changes. AS 6 applies to depreciation of assets except certain items. AS 7 addresses accounting for construction contract revenue and costs. AS 8 was withdrawn and replaced by AS 26. AS 9 covers revenue recognition from sales, interest, dividends and royalties. AS 10 requires disclosure of information about fixed assets.
The document summarizes Accounting Standard 6 regarding depreciation accounting in India. It defines depreciation as the wearing out or loss of value of an asset due to use over time. Depreciable assets must be used for more than one accounting period and have a limited useful life. The standard outlines acceptable depreciation methods like straight-line and written down value. It specifies when a change in depreciation method is appropriate and how to account for it. The document also discusses factors to consider in determining an asset's useful life and residual value for depreciation purposes.
This document summarizes the history and contents of International Accounting Standard 16 (IAS 16) relating to property, plant, and equipment. It notes that IAS 16 was originally issued in 1993 and has since been revised and amended multiple times, with the most recent amendments relating to agriculture and fair value measurement. The document then provides an overview of the objectives, scope, definitions, recognition and measurement principles, and disclosure requirements of IAS 16.
This document provides an overview of Accounting Standard 6 on depreciation accounting in India. It discusses the applicability of depreciation accounting, the concept and calculation of depreciation, methods for charging depreciation, disclosures required, and clarifies some queries around depreciation of low value assets and land leases. The standard aims to provide guidance on a systematic allocation of the depreciable amount of an asset over its useful life.
Ias 16 property plant and equipment-presentationShadabAhmadFaiq
The document discusses the key aspects of IAS 16 Property, Plant and Equipment including:
- The objective is to prescribe the accounting treatment for property, plant and equipment.
- Scope outlines what is excluded like IFRS 5 and IAS 40.
- Definitions for terms like PPE, carrying amount, depreciation.
- Recognition criteria that future benefits are probable and cost can be reliably measured.
- Measurement includes initial cost and subsequent cost model or revaluation model.
- Depreciation is systematically allocated over useful life.
- Impairment is assessed using IAS 36.
- Derecognition occurs from disposal or no future benefits are expected.
1) The document discusses depreciation accounting, including definitions, objectives, factors affecting depreciation amounts, and methods of calculating depreciation.
2) The two most common depreciation methods are the straight-line method, which allocates equal amounts of depreciation each period, and the reducing balance method, which allocates higher amounts initially that decrease over time.
3) Other topics covered include accounting entries for depreciation, illustrations of depreciation calculations using different methods, and the sum-of-years digits method.
This document discusses Accounting Standard 2 and 6. AS 2 provides guidance on determining inventory costs and valuation. It specifies methods for computing inventory costs and determining the amount to report in financial statements. AS 6 deals with depreciation accounting. It applies to all depreciable assets except certain specified items. AS 6 requires that the depreciable amount of an asset be allocated systematically over its useful life and that the depreciation method be applied consistently over time. Both standards provide principles for uniform accounting practices related to inventory valuation and depreciation.
This document provides an overview of depreciation accounting. It defines depreciation as the permanent decrease in the value of an asset due to factors like wear and tear, obsolescence, or the passage of time. The document outlines various causes of depreciation including wear and tear, exhaustion, effluxion of time, weather effects, and permanent declines in asset value. It also discusses objectives of recording depreciation such as correctly calculating profits, complying with legal requirements, and maintaining the integrity of capital. Finally, the document introduces different depreciation methods used in accounting like the straight-line method, declining balance method, and annuity method.
The document discusses the key aspects of Ind AS 16 regarding the accounting treatment of property, plant, and equipment. It covers topics such as:
- Timing of recognizing assets and determining carrying amounts
- Components of asset cost and subsequent costs
- Depreciation methods and impairment
- Useful life and residual value definitions
- Recognition, measurement, and derecognition of property, plant, and equipment
The document provides definitions of important terms related to property, plant, and equipment accounting and outlines the objectives, scope, and applicability of Ind AS 16.
This document provides information about accounting for fixed assets and depreciation. It defines depreciation as a measure of the wearing out of an asset's value from use over time. Depreciable assets must be used for more than one period and have a limited useful life. Depreciation is calculated based on the historical cost, useful life, and estimated residual value of an asset. Common depreciation methods include straight-line and declining balance. The document also compares depreciation standards between AS-6, GAAP, and IAS-16.
This document discusses depreciation accounting. It defines depreciation accounting as allocating the cost of a tangible capital asset over its estimated useful life. Depreciation represents the gradual conversion of the asset's capitalized cost into an expense that is allocated to different periods. The document discusses different terms used for allocating costs of different asset types, such as depreciation for physical assets, depletion for natural resources, and amortization for intangible assets. It also discusses factors that influence the amount of depreciation charged each year, such as original cost, estimated useful life, additions made to the asset, and estimated residual value.
This document summarizes Accounting Standard 6 on depreciation accounting in India. It defines depreciation and outlines the key aspects of depreciation accounting such as depreciable assets, useful life, methods of calculating depreciation, and changes in depreciation rates. The standard provides guidance on determining depreciable amounts, selecting depreciation methods, calculating depreciation on additions/extensions, and disclosure requirements for depreciation in financial statements.
The document discusses accounting issues related to the natural gas value chain and oil and gas reserves and resources reporting under IFRS. It addresses key issues such as the capitalization and expensing of exploration costs, and differences between the full cost and successful efforts methods of accounting. It also covers accounting for reserves and resources, the classification of exploration assets as tangible or intangible, and restrictions on changing accounting policies for exploration costs under IFRS 6 when first adopting IFRS.
This document discusses key changes to depreciation and reporting under the Companies Act 2013. Some important points include:
1) Schedule II provides indicative useful lives for tangible assets and requires residual value to be no more than 5% of original cost. Depreciation must be provided on cost or any other substituted value.
2) Companies are classified as Class I or Class II based on flexibility with useful lives and residual values. Certain disclosures are required if different rates than Schedule II are used.
3) Transitional provisions allow carrying amounts to be depreciated over remaining useful life per Schedule II or recognized in retained earnings if life is nil.
4) Significant changes include component accounting, identification of significant parts
This document discusses 9 issues related to the accounting standard AS 6 on depreciation accounting in India. It addresses questions on which assets depreciation does not apply to, factors considered in computing depreciation, circumstances impacting useful life, requirements for changing depreciation methods, implications of asset revaluation, and more. Key points covered include that depreciation must be provided annually regardless of increased market value, schedules may require higher depreciation rates if useful life is shorter than estimated, and revalued assets require depreciation based on remaining useful life, not scheduled rates.
Ind AS (Indian Accounting Standards) will replace Indian GAAP and be applicable to certain companies beginning in 2016. Major changes include requirements for companies to present financial statements including a balance sheet, income statement, statement of changes in equity, and cash flow statement. Accounting standards on property, plant, and equipment, financial instruments, and revenue recognition were also updated. Ind AS requires the classification and measurement of financial instruments based on contractual cash flows and business models. It also introduces expected credit losses for impairment of financial assets to account for estimated future losses in a forward-looking manner.
Problems based on accounting standards and guidance notes finalDwara Balaji
This document contains 12 questions related to accounting standards and guidance notes. The questions cover topics such as events occurring after the balance sheet date, prior period items, pre-incorporation expenses, revaluation of fixed assets, revenue recognition, extraordinary items, cash flow statements, and changes in accounting policies. For each question, the relevant accounting treatments, disclosures, or guidance from standards are discussed in detail in the response.
The document discusses depreciation, which is the decline in the value of fixed assets over time due to use, age, or obsolescence. Depreciation is accounted for for tax and profit purposes by allocating the cost of the asset over its useful life. It ensures that the costs are matched to the periods that benefit from use of the asset. Common methods to calculate depreciation include straight-line and written down value. The document also discusses the need to create provisions and reserves to cover uncertain costs and retain profits for future needs.
Similar to As 06 depreciation accounting 1994 20080928 (20)
বাংলাদেশের অর্থনৈতিক সমীক্ষা ২০২৪ [Bangladesh Economic Review 2024 Bangla.pdf] কম্পিউটার , ট্যাব ও স্মার্ট ফোন ভার্সন সহ সম্পূর্ণ বাংলা ই-বুক বা pdf বই " সুচিপত্র ...বুকমার্ক মেনু 🔖 ও হাইপার লিংক মেনু 📝👆 যুক্ত ..
আমাদের সবার জন্য খুব খুব গুরুত্বপূর্ণ একটি বই ..বিসিএস, ব্যাংক, ইউনিভার্সিটি ভর্তি ও যে কোন প্রতিযোগিতা মূলক পরীক্ষার জন্য এর খুব ইম্পরট্যান্ট একটি বিষয় ...তাছাড়া বাংলাদেশের সাম্প্রতিক যে কোন ডাটা বা তথ্য এই বইতে পাবেন ...
তাই একজন নাগরিক হিসাবে এই তথ্য গুলো আপনার জানা প্রয়োজন ...।
বিসিএস ও ব্যাংক এর লিখিত পরীক্ষা ...+এছাড়া মাধ্যমিক ও উচ্চমাধ্যমিকের স্টুডেন্টদের জন্য অনেক কাজে আসবে ...
Chapter wise All Notes of First year Basic Civil Engineering.pptxDenish Jangid
Chapter wise All Notes of First year Basic Civil Engineering
Syllabus
Chapter-1
Introduction to objective, scope and outcome the subject
Chapter 2
Introduction: Scope and Specialization of Civil Engineering, Role of civil Engineer in Society, Impact of infrastructural development on economy of country.
Chapter 3
Surveying: Object Principles & Types of Surveying; Site Plans, Plans & Maps; Scales & Unit of different Measurements.
Linear Measurements: Instruments used. Linear Measurement by Tape, Ranging out Survey Lines and overcoming Obstructions; Measurements on sloping ground; Tape corrections, conventional symbols. Angular Measurements: Instruments used; Introduction to Compass Surveying, Bearings and Longitude & Latitude of a Line, Introduction to total station.
Levelling: Instrument used Object of levelling, Methods of levelling in brief, and Contour maps.
Chapter 4
Buildings: Selection of site for Buildings, Layout of Building Plan, Types of buildings, Plinth area, carpet area, floor space index, Introduction to building byelaws, concept of sun light & ventilation. Components of Buildings & their functions, Basic concept of R.C.C., Introduction to types of foundation
Chapter 5
Transportation: Introduction to Transportation Engineering; Traffic and Road Safety: Types and Characteristics of Various Modes of Transportation; Various Road Traffic Signs, Causes of Accidents and Road Safety Measures.
Chapter 6
Environmental Engineering: Environmental Pollution, Environmental Acts and Regulations, Functional Concepts of Ecology, Basics of Species, Biodiversity, Ecosystem, Hydrological Cycle; Chemical Cycles: Carbon, Nitrogen & Phosphorus; Energy Flow in Ecosystems.
Water Pollution: Water Quality standards, Introduction to Treatment & Disposal of Waste Water. Reuse and Saving of Water, Rain Water Harvesting. Solid Waste Management: Classification of Solid Waste, Collection, Transportation and Disposal of Solid. Recycling of Solid Waste: Energy Recovery, Sanitary Landfill, On-Site Sanitation. Air & Noise Pollution: Primary and Secondary air pollutants, Harmful effects of Air Pollution, Control of Air Pollution. . Noise Pollution Harmful Effects of noise pollution, control of noise pollution, Global warming & Climate Change, Ozone depletion, Greenhouse effect
Text Books:
1. Palancharmy, Basic Civil Engineering, McGraw Hill publishers.
2. Satheesh Gopi, Basic Civil Engineering, Pearson Publishers.
3. Ketki Rangwala Dalal, Essentials of Civil Engineering, Charotar Publishing House.
4. BCP, Surveying volume 1
This document provides an overview of wound healing, its functions, stages, mechanisms, factors affecting it, and complications.
A wound is a break in the integrity of the skin or tissues, which may be associated with disruption of the structure and function.
Healing is the body’s response to injury in an attempt to restore normal structure and functions.
Healing can occur in two ways: Regeneration and Repair
There are 4 phases of wound healing: hemostasis, inflammation, proliferation, and remodeling. This document also describes the mechanism of wound healing. Factors that affect healing include infection, uncontrolled diabetes, poor nutrition, age, anemia, the presence of foreign bodies, etc.
Complications of wound healing like infection, hyperpigmentation of scar, contractures, and keloid formation.
How to Fix the Import Error in the Odoo 17Celine George
An import error occurs when a program fails to import a module or library, disrupting its execution. In languages like Python, this issue arises when the specified module cannot be found or accessed, hindering the program's functionality. Resolving import errors is crucial for maintaining smooth software operation and uninterrupted development processes.
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...PECB
Denis is a dynamic and results-driven Chief Information Officer (CIO) with a distinguished career spanning information systems analysis and technical project management. With a proven track record of spearheading the design and delivery of cutting-edge Information Management solutions, he has consistently elevated business operations, streamlined reporting functions, and maximized process efficiency.
Certified as an ISO/IEC 27001: Information Security Management Systems (ISMS) Lead Implementer, Data Protection Officer, and Cyber Risks Analyst, Denis brings a heightened focus on data security, privacy, and cyber resilience to every endeavor.
His expertise extends across a diverse spectrum of reporting, database, and web development applications, underpinned by an exceptional grasp of data storage and virtualization technologies. His proficiency in application testing, database administration, and data cleansing ensures seamless execution of complex projects.
What sets Denis apart is his comprehensive understanding of Business and Systems Analysis technologies, honed through involvement in all phases of the Software Development Lifecycle (SDLC). From meticulous requirements gathering to precise analysis, innovative design, rigorous development, thorough testing, and successful implementation, he has consistently delivered exceptional results.
Throughout his career, he has taken on multifaceted roles, from leading technical project management teams to owning solutions that drive operational excellence. His conscientious and proactive approach is unwavering, whether he is working independently or collaboratively within a team. His ability to connect with colleagues on a personal level underscores his commitment to fostering a harmonious and productive workplace environment.
Date: May 29, 2024
Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
-------------------------------------------------------------------------------
Find out more about ISO training and certification services
Training: ISO/IEC 27001 Information Security Management System - EN | PECB
ISO/IEC 42001 Artificial Intelligence Management System - EN | PECB
General Data Protection Regulation (GDPR) - Training Courses - EN | PECB
Webinars: https://pecb.com/webinars
Article: https://pecb.com/article
-------------------------------------------------------------------------------
For more information about PECB:
Website: https://pecb.com/
LinkedIn: https://www.linkedin.com/company/pecb/
Facebook: https://www.facebook.com/PECBInternational/
Slideshare: http://www.slideshare.net/PECBCERTIFICATION
How to Setup Warehouse & Location in Odoo 17 InventoryCeline George
In this slide, we'll explore how to set up warehouses and locations in Odoo 17 Inventory. This will help us manage our stock effectively, track inventory levels, and streamline warehouse operations.
it describes the bony anatomy including the femoral head , acetabulum, labrum . also discusses the capsule , ligaments . muscle that act on the hip joint and the range of motion are outlined. factors affecting hip joint stability and weight transmission through the joint are summarized.
2. 94 AS 6 (issued 1982)
Accounting Standard (AS) 6*
(revised 1994)
Depreciation Accounting
(This Accounting Standard includes paragraphs 20-29 set in bold italic
type and paragraphs 1-19 set in plain type, which have equal authority.
Paragraphs in bold italic type indicate the main principles. This
Accounting Standard should be read in the context of the Preface to the
Statements of Accounting Standards 1 .)
The following is the text of the revised Accounting Standard (AS) 6,
‘Depreciation Accounting’, issued by the Council of the Institute of Chartered
Accountants of India.
* Accounting Standard (AS) 6, Depreciation Accounting, was issued by the Institute
in November 1982. Subsequently, in the context of insertion of Schedule XIV in the
Companies Act in 1988, the Institute brought out a Guidance Note on Accounting for
Depreciation in Companies which came into effect in respect of accounting periods
commencing on or after 1st April, 1989. The Guidance Note differed from AS 6 in
respect of accounting treatment of (a) change in the method of depreciation, and (b)
change in the rates of depreciation. It was clarified in the Guidance Note, with regard
to the matter at (a), that AS 6 would be revised to bring it in line with the recom-
mendations of the Guidance Note.
Based on the recommendations of the Accounting Standards Board, the Council
of the Institute at its 168th meeting, held on May 26-29, 1994, decided to bring AS 6
in line with the Guidance Note in respect of both of the aforementioned matters.
Accordingly, it was decided to modify paragraphs 11, 15, 22 and 24 and delete paragraph
19 of AS 6. Also, in the context of delinking of rates of depreciation under the
Companies Act from those under the Income-tax Act/Rules by the Companies
(Amendment) Act, 1988, the Council decided to suitably modify paragraph 13 of AS
6. An announcement to this effect was published in the August 1994 issue of The
Chartered Accountant (pp. 218-219).
AS 6 is mandatory in respect of accounts for periods commencing on or after
1.4.1995. Reference may be made to the section titled ‘Announcements of the Council
regarding status of various documents issued by the Institute of Chartered
Accountants of India’ appearing at the beginning of this Compendium for a detailed
discussion on the implications of the mandatory status of an accounting standard.
From the date of Accounting Standard (AS) 26, ‘Intangible Assets’, becoming
mandatory for the concerned enterprises, this Standard stands withdrawn insofar as
it relates to the amortisation (depreciation) of intangible assets (See AS 26).
1 Attention is specifically drawn to paragraph 4.3 of the Preface, according to which
Accounting Standards are intended to apply only to items which are material.
3. Depreciation Accounting 101
Introduction
1. This Statement deals with depreciation accounting and applies to all
depreciable assets, except the following items to which special considerations
apply:—
(i) forests, plantations and similar regenerative natural resources;
(ii) wasting assets including expenditure on the exploration for and
extraction of minerals, oils, natural gas and similar non-regenerative
resources;
(iii) expenditure on research and development;
(iv) goodwill;
(v) live stock.
This statement also does not apply to land unless it has a limited useful life
for the enterprise.
2. Different accounting policies for depreciation are adopted by different
enterprises. Disclosure of accounting policies for depreciation followed by
an enterprise is necessary to appreciate the view presented in the financial
statements of the enterprise.
Definitions
3. The following terms are used in this Statement with the meanings
specified:
3.1 Depreciation is a measure of the wearing out, consumption or other
loss of value of a depreciable asset arising from use, effluxion of time or
obsolescence through technology and market changes. Depreciation is
allocated so as to charge a fair proportion of the depreciable amount in each
accounting period during the expected useful life of the asset. Depreciation
includes amortisation of assets whose useful life is predetermined.
3.2 Depreciable assets are assets which
(i) are expected to be used during more than one accounting period;
and
4. 102 AS 6 (revised 1994)
(ii) have a limited useful life; and
(iii) are held by an enterprise for use in the production or supply of
goods and services, for rental to others, or for administrative
purposes and not for the purpose of sale in the ordinary course of
business.
3.3 Useful life is either (i) the period over which a depreciable asset is
expected to be used by the enterprise; or (ii) the number of production or
similar units expected to be obtained from the use of theassetbytheenterprise.
3.4 Depreciable amount of a depreciable asset is its historical cost, or
other amount substituted for historical cost2 in the financial statements, less
the estimated residual value.
Explanation
4. Depreciation has a significant effect in determining and presenting the
financial position and results of operations of an enterprise. Depreciation is
charged in each accountingperiod byreferenceto theextentof thedepreciable
amount, irrespective of an increase in the market value of the assets.
5. Assessment of depreciation and the amount to be charged in respect
thereof in an accounting period are usually based on the following three
factors:
(i) historical cost or other amount substituted for the historical cost
of the depreciable asset when the asset has been revalued;
(ii) expected useful life of the depreciable asset; and
(iii) estimated residual value of the depreciable asset.
6. Historical cost of a depreciable asset represents its money outlay or its
equivalent in connection with its acquisition, installation and commissioning
as well as for additions to or improvement thereof. The historical cost of a
depreciable asset may undergo subsequent changes arising as a result of
increase or decrease in long term liability on account of exchange fluctuations,
price adjustments, changes in duties or similar factors.
2
This statement does not deal with the treatment of the revaluation difference
which may arise when historical costs are substituted by revaluations.
5. Depreciation Accounting 103
7. The useful life of a depreciable asset is shorter than its physical life and
is:
(i) pre-determined by legal or contractual limits, such as the expiry
dates of related leases;
(ii) directly governed by extraction or consumption;
(iii) dependent on the extent of use and physical deterioration on
account of wear and tear which again depends on operational
factors, such as, the number of shifts for which the asset is to be
used, repair and maintenance policy of the enterprise etc.; and
(iv) reduced by obsolescence arising from such factors as:
(a) technological changes;
(b) improvement in production methods;
(c) change in market demand for the product or service output
of the asset; or
(d) legal or other restrictions.
8. Determination of the useful life of a depreciable asset is a matter of
estimation and is normally based on various factors including experience
with similar types of assets. Such estimation is more difficult for an asset
using new technology or used in the production of a new product or in the
provision of a new service but is nevertheless required on some reasonable
basis.
9. Any addition or extension to an existing asset which is of a capital nature
and which becomes an integral part of the existing asset is depreciated over
the remaining useful life of that asset. As a practical measure, however,
depreciation is sometimes provided on such addition or extension at the rate
which is applied to an existing asset. Any addition or extension which retains
a separate identity and is capable of being used after the existing asset is
disposed of, is depreciated independently on the basis of an estimate of its
own useful life.
10. Determination of residual value of an asset is normally a difficult matter.
If such value is considered as insignificant, it is normally regarded as nil. On
6. 104 AS 6 (revised 1994)
the contrary, if the residual value is likely to be significant, it is estimated at
the time of acquisition/installation, or at the time of subsequent revaluation of
the asset. One of the bases for determining the residual value would be the
realisable value of similar assets which have reached the end of their useful
lives and have operated under conditions similar to those in which the asset
will be used.
11. The quantum of depreciation to be provided in an accounting period
involves the exercise of judgement by management in the light of technical,
commercial, accounting and legal requirements and accordingly may need
periodical review. If it is considered that the original estimate of useful life of
an asset requires any revision, the unamortised depreciable amount of the
asset is charged to revenue over the revised remaining useful life.
12. There are several methods of allocating depreciation over the useful
life of the assets. Those most commonly employed in industrial and
commercial enterprises are the straightline method and the reducing balance
method. The management of a business selects the most appropriate
method(s) based on various important factors e.g., (i) type of asset, (ii) the
nature of the use of such asset and (iii) circumstances prevailing in the
business. A combination of more than one method is sometimes used. In
respect of depreciable assets which do not have material value, depreciation
is often allocated fully in the accounting period in which they are acquired.
13. The statute governing an enterprise may provide the basis for computation
of the depreciation. For example, the Companies Act, 1956 lays down the
rates of depreciation in respect of various assets. Where the management’s
estimate of the useful life of an asset of the enterprise is shorter than that
envisaged under the provisions of the relevant statute, the depreciation
provision
is appropriately computed by applying a higher rate. If the management’s
estimate of the useful life of the asset is longer than that envisaged under the
statute, depreciation rate lower than that envisaged by the statute can be
applied only in accordance with requirements of the statute.
14. Where depreciable assets are disposed of, discarded, demolished or
destroyed, the net surplus or deficiency, if material, is disclosed separately.
15. The method of depreciation is applied consistently to provide
comparability of the results of the operations of the enterprise from period to
period. A change from one method of providing depreciation to another is
made only if the adoption of the new method is required by statute or for
7. Depreciation Accounting 105
compliance with an accounting standard or if it is considered that the change
would result in a more appropriate preparation or presentation of the financial
statements of the enterprise. When such a change in the method of
depreciation is made, depreciation is recalculated in accordance with the
new method from the date of the asset coming into use. The deficiency or
surplus arising from retrospective recomputation of depreciation in accordance
with the new method is adjusted in the accounts in the year in which the
method of depreciation is changed. In case the change in the method results
in deficiency in depreciation in respect of past years, the deficiency is charged
in the statement of profit and loss. In case the change in the method results
in surplus, the surplus is credited to the statement of profit and loss. Such a
change is treated as a change in accounting policy and its effect is quantified
and disclosed.
16. Where the historical cost of an asset has undergone a change due to
circumstances specified in para 6 above, the depreciation on the revised
unamortised depreciable amount is provided prospectively over the residual
useful life of the asset.
Disclosure
17. The depreciation methods used, the total depreciation for the period for
each class of assets, the gross amount of each class of depreciable assets and
the related accumulated depreciation are disclosed in the financial statements
alongwith the disclosure of other accounting policies. The depreciation rates
or the useful lives of the assets are disclosed only if they are different from
the principal rates specified in the statute governing the enterprise.
18. In case the depreciable assets are revalued, the provision for
depreciation is based on the revalued amount on the estimate of the remaining
useful life of such assets. In case the revaluation has a material effect on the
amount of depreciation, the same is disclosed separately in the year in which
revaluation is carried out.
19. A change in the method of depreciation is treated as a change in an
accounting policy and is disclosed accordingly.3
3 Refer to AS 5.
8. 106 AS 6 (revised 1994)
Accounting Standard
20. The depreciable amount of a depreciable asset should be allocated
on a systematic basis to each accounting period during the useful life of
the asset.
21. The depreciation method selected should be applied consistently
from period to period. A change from one method of providing
depreciation to another should be made only if the adoption of the new
method is required by statute or for compliance with an accounting
standard or if it is considered that the change would result in a more
appropriate preparation or presentation of the financial statements of
the enterprise. When such a change in the method of depreciation is
made, depreciation should be recalculated in accordance with the new
method from the date of the asset coming into use. The deficiency or
surplus arising from retrospective recomputation of depreciation in
accordance with the new method should be adjusted in the accounts in
the year in which the method of depreciation is changed. In case the
change in the method results in deficiency in depreciation in respect of
past years, the deficiency should be charged in the statement of profit
and loss. In case the change in the method results in surplus, the surplus
should be credited to the statement of profit and loss. Such a change
should be treated as a change in accounting policy and its effect should
be quantified and disclosed.
22. The useful life of a depreciable asset should be estimated after
considering the following factors:
(i) expected physical wear and tear;
(ii) obsolescence;
(iii) legal or other limits on the use of the asset.
23. The useful lives of major depreciable assets or classes of
depreciable assets may be reviewed periodically. Where there is a revision
of the estimated useful life of an asset, the unamortised depreciable
amount should be charged over the revised remaining useful life.
24. Any addition or extension which becomes an integral part of the
existing asset should be depreciated over the remaining useful life of
that asset. The depreciation on such addition or extension may also be
9. Depreciation Accounting 107
provided at the rate applied to the existing asset. Where an addition or
extension retains a separate identity and is capable of being used after
the existing asset is disposed of, depreciation should be provided
independently on the basis of an estimate of its own useful life.
25. Where the historical cost of a depreciable asset has undergone a
change due to increase or decrease in long term liability on account of
exchange fluctuations, price adjustments, changes in duties or similar
factors, the depreciation on the revised unamortised depreciable amount
should be provided prospectively over the residual useful life of the
asset.
26. Where the depreciable assets are revalued, the provision for
depreciation should be based on the revalued amount and on the estimate
of the remaining useful lives of such assets. In case the revaluation has
a material effect on the amount of depreciation, the same should be
disclosed separately in the year in which revaluation is carried out.
27. If any depreciable asset is disposed of, discarded, demolished or
destroyed, the net surplus or deficiency, if material, should be disclosed
separately.
28. The following information should be disclosed in the financial
statements:
(i) the historical cost or other amount substituted for historical
cost of each class of depreciable assets;
(ii) total depreciation for the period for each class of assets; and
(iii) the related accumulated depreciation.
29. The following information should also be disclosed in the financial
statements alongwith the disclosure of other accounting policies:
(i) depreciation methods used; and
(ii) depreciation rates or the useful lives of the assets, if they are
different from the principal rates specified in the statute
governing the enterprise.