Accounting>India Financial Reporting Manager Practice Manual>Comparison between AS & Ind AS & IFRS>[C06] AS6 & AS10 v IND

AS16 v IAS16

[C06] AS6 & AS10 v IND AS16 v IAS16

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Last reviewed: 17 May 2013
S. No.

Topic

AS
IND AS
IFRS
AS 6 - Depreciation
Accounting and
AS 10 - Accounting
Ind-AS 16 - Property,
IAS 16 - Property,

for Fixed Assets

Plant and Equipment
Plant and Equipment
Scope
There is no exemption Property under construction or
Property under construction or
from AS -10 for propertydevelopment for future use as
development for future use as
under development
investment property is excluded
investment property is excluded
for future use as
from the scope of Ind AS 16 and
from the scope of IAS 16 and
investment property.
is within the scope of Ind AS 40,
is within the scope of IAS 40,
However As - 10
Investment Property. However
Investment Property. However
specifically excludes
Ind AS 16 does not exclude such Ind AS 16 does not exclude such
accounting for real
developers from its scope
developers from its scope
estate developers from
its scope
Replacement
Replacement cost of
Replacement cost of an item of
Replacement cost of an item of
Costs
an item of property,
property, plant and equipment is
property, plant and equipment is
plant and equipment
capitalised if replacement meets
capitalised if replacement meets
is generally expensed the recognition criteria. Carrying
the recognition criteria. Carrying
when incurred
amount of items replaced is
amount of items replaced is
derecognised.
derecognised.
Cost of
Costs of major
Cost of major inspections and
Cost of major inspections and
Major
inspection are also
overhauls are recognised in the
overhauls are recognised in the
Inspections expensed when
carrying amount of property, plant carrying amount of property, plant
incurred.
and equipment as a replacement
and equipment as a replacement
if recognition criteria are met. Any if recognition criteria are met. Any
remaining carrying amount of the remaining carrying amount of the
cost of the previous inspection is
cost of the previous inspection is
derecognised
derecognised
RevaluationNo specific requirement If an entity adopts the revaluation If an entity adopts the revaluation
on frequency of
model, revaluations are require to model, revaluations are require to
revaluation
be made with sufficient regularity
be made with sufficient regularity
to ensure that the carrying amount to ensure that the carrying amount
does not differ materially from the does not differ materially from the
fair value at the end of reporting
fair value at the end of reporting
period.
period.
Component Fixed assets are
Property, Plant and Equipment are Property, Plant and Equipment are
Accounting not required to be
componentized and are depreciated componentized and are depreciated
componentised and
separately. There is no concept
separately. There is no concept
depreciated separately, of minimum statutory depreciation of minimum statutory depreciation
although AS 10 states under Ind AS
under IFRS
that such an approach
may improve the
accounting for an item
of fixed asset. Schedule
XIV to the Companies
Act, 1956 specifies the
minimum depreciation
rates to be used for
different categories of
assets
Compensation
No specific
Compensation from third parties
Compensation from third parties
for
requirement. In
for impairment or loss of items of
for impairment or loss of items of
Impairment practice, compensation property, plants & equipment are
property, plants & equipment are

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Accounting>India Financial Reporting Manager Practice Manual>Comparison between AS & Ind AS & IFRS>[C06] AS6 & AS10 v IND AS16 v IAS16

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is offset against
included in profit & loss when the included in profit & loss when the
replaced items of
compensation becomes receivable compensation becomes receivable
property, plant &
equipment
Transfer
Transfer from
Transfer from revaluation reserve to Transfer from revaluation reserve to
from
revaluation reserve may retained earnings are made directly retained earnings are made directly
revaluation be done through the
and not through profit & loss.
and not through profit & loss.
reserve
statement of profit &
loss
Reassessment
- Estimates of residual - Estimates of residual value needs - Estimates of residual value needs
value are not required to be reviewed at least at the end of to be reviewed at least at the end of
to be updated
each financial year
each financial year

- Reassessment
- Reassessment of useful life and - Reassessment of useful life and
of useful life and
depreciation method requires
depreciation method requires
depreciation method notannual reassessment
annual reassessment
currently required
Change in Requires retrospective If there has been a significant
If there has been a significant
method of re-computation of
change in the expected pattern of change in the expected pattern of
depreciationdepreciation and any consumption of the future economic consumption of the future economic
excess or deficit on
benefits associated with the asset, benefits associated with the asset,
such re-computation
the method should be changed to the method should be changed to
is required to be
reflect the changed pattern. Such a reflect the changed pattern. Such a
adjusted in the period change should be accounted for as change should be accounted for as
in which such change a change in an accounting estimate a change in an accounting estimate
is effected. Such a
and applied prospectively. The
and applied prospectively. The
change is treated as a depreciation method applied to an depreciation method applied to an
change in accounting asset should be reviewed at least at asset should be reviewed at least at
policy and its effect
each financial year-end.
each financial year-end.
is quantified and
disclosed. There is no
requirement to review
the depreciation method
on an annual basis.
PresentationSchedule VI requires No specific guidance though usually No specific guidance though usually
of capital capital advances
included in capital work in progress included in capital work in progress
Advances to be presented
separately under the
head Long Term loans
& advances as part of
non current assets.
Routine
No specific guidance Entities might routinely sell items
Entities might routinely sell items
sale of
of property, plant & equipment that of property, plant & equipment that
some
they have previously held for rental they have previously held for rental
properties
to others. The proceeds from sale ofto others. The proceeds from sale of
such assets should be recognised such assets should be recognised
as revenue in accordance with Ind as revenue in accordance with IAS
AS 18
18
Decommissioning,
No specific guidance Provision for decommissioning,
Provision for decommissioning,
Restoration
Restoration and Similar Liabilities Restoration and Similar Liabilities
and Similar
that have been previously
that have been previously
Liabilities
recognised as part of the cost of an recognised as part of the cost of an
item of property, plant & equipment item of property, plant & equipment
are adjusted for changes in amount are adjusted for changes in amount
or timing of future costs and for
or timing of future costs and for
changes in market based discount changes in market based discount
rates.
rates.

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