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INTRODUCTION
Fixed assets are those assets which are purchase for the
purpose of operating the business and not for resale.
TANGIBLE ASSETS
EXAMPLE:-Land , building and Computer etc.
INTANGIBALE ASSETS
EXAMPLE:-Goodwill, Patents and Trademarks etc.
VALUATION OF FIXED ASSETS
The ICAI has issued the Accounting Standard (AS-10)
“Accounting for Fixed Assets” which defines fixed assets, sets
out their significance, specifies the fixed assets excluded from
its scope coverage and prescribes the principles and norms of
standards accounting treatment for various aspects of fixed
assets valuation and accounting, i.e.., identification ,
measurement, valuation, recognition, retirements and disposals
and disclosure requirement in financial statements prepared on
historical cost basis including revaluation. Let us discus,
understand and analysis these.
FIXED ASSETS OF SPECIAL TYPES
Goodwill, in general, is recorded in the books only
when some consideration in money or money’s worth
has been paid for it.
Whenever a business is acquired for a price which is
in excess of the value of the net assets of the business
taken over, the excess is termed as ‘goodwill’.
Goodwill arises from business connections, trade
name or reputation of an enterprise or from other
intangible benefits enjoyed by an enterprise.
EXAMPLE FOR VALUATION OF FIXED ASSETS :
XYZ Ltd has certain Assets :
Building Rs. 200000
Plant & Machinery Rs. 100000
Furniture Rs. 80000
Goodwill Rs. 50000
Stock Rs. 65000
Sundry Debtors Rs. 10000
Cash Rs. 54000
Find out the Fixed Assets & Charge Depreciation
Fixed Assets :-
Building Rs. 200000
Less – Dep. (10%) Rs. 20000
Rs. 180000