TANGIBLE NON CURRENT ASSETS

Tangible non current assets

Tangible non current assets

Objective

Tangible assets are in such companies, in the production or administration, or for the purpose of renting to a third party for more than one period (in contrast to current assets) are used. The accounting policies of IAS 16 (Property, Plant and Equipment) serve users of financial statements information about a company's investment in tangible fixed assets and changes to give such investments. The principal issues in accounting for property, plant and equipment are the recognition of assets, the determination of their carrying amounts and the depreciation charges and impairment losses. Intangible assets are dealt with in IAS 38 Intangible Assets (Intangible Assets).

Content / structure

Example of the breakdown of fixed assets

Assets

A. Intangible assets

B. Tangible assets

I. Land, leasehold rights and buildings including buildings on leasehold land

II. Technical plant and machinery.

III. Other equipment, fixtures and equipment

IV. Advance payments and construction in progress

C. Other financial assets

Balance sheet approach

Criteria for capitalization of fixed assets (capitalized) are

1. The likelihood that a future economic benefit can be assigned to the company of property, plant and

2. A reliable determination of the acquisition or production costs (Elliott 1999, 74).

Explanation

The future economic benefits can also be given indirectly: How to increase safety, security or environmental reasons, acquired fixed assets not directly the future economic benefits. Such assets are yet to be recognized as assets because they enable a company in the first place. To continue the operation and thus to attract future economic benefits from other assets.

Assessment

Access Review

Initial recognition is at acquisition or production costs (APC).

Cost

Among the APC

1. Originally designed for the acquisition or construction of property, plant and costs incurred

2. The costs to add something to replace or repair, provided that such costs mean that the state or the performance of the asset to improve substantially.

Example

Adaptations of a plant, resulting in a longer life or higher capacity, ongoing maintenance costs, recognized in income when incurred, they change the state or simply maintain rather than improve performance (Beattie 2008, 97).

Subsequent acquisition or manufacturing operations

Fixed assets are valued in principle at cost of acquisition or construction of the assets. This cost should be updated later to reflect the effects of inflation (monetary correction). The values to the fixed assets register should include all costs directly related to its acquisition or construction, including those necessary for the goods will be ready to be used by the Buyer. Therefore, the cost of fixed assets should include items such as design cost, transportation charges, installation costs; values needed to raise existing taxes, initial reconstruction costs, legal fees and other needs that accrues and financing costs discussed in International standards. The discounts obtained in the acquisition of an asset should stoop of cost (Schipper 2005, 39).

In the case of real estate, the accounts must register separate the value assigned to the land and buildings, if any, using a method appropriate in the circumstances. If the existing buildings on the buildings to be demolished purchased in order to leave the well in terms ...