AS-10

INTRODUCTION

Accounting Standard 10 Issued at 1985

Financial Statements disclose certain information
relating to Fixed assets. In many enterprises this
Assets are grouped into various categories, such as
Land, Building, Machinery, Vehicles, Furniture
&Fittings, Goodwill, Patents, Trademarks etc.
 WHAT IS FIXED ASSETS ?

Fixed assets are those assets which are purchase for the
purpose of operating the business and not for resale.

Example:- Land, Building, Machinery, Furniture etc.

 TYPES OF FIXED ASSETS

TANGIBLE ASSETS
EXAMPLE:-Land , building and Computer etc.

INTANGIBALE ASSETS
EXAMPLE:-Goodwill, Patents and Trademarks etc.
SIGNIFICANCE OF FIXED ASSETS
Fixed assets often comprise a significant portion
of total assets of enterprise and therefore are
important in the presentation, assessment and
evaluation of its financial position and strength.
The determination of whether an expense
represents a fixed assets can have material effect
on a company’s reports as results of operations.
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.
STATEMENT DOES NOT DEAL WITH
ACCOUNTING FOR THE FOLLOWING ITEMS :

- Forest, Plantation & similar regenerative Natural

resources
- Wasting Assets including Oil, Natural gas etc
- Expenditure on Real Estate Development
- Live stock
 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

* If the Dep. is not mentioned in the question we

assumed the Dep. On Building would be 10% p.a as
per Accounting Standard 6.
 Fixed Assets :-
Plant & Machinery Rs. 100000
Less – Dep. (15%) Rs. 15000
Rs. 85000

* If the Dep. is not mentioned in the question we

assumed the Dep. On Plant & Machinery would be
15% p.a as per Accounting Standard 6.
 Fixed Assets :-
Furniture Rs. 80000
Less – Dep. (5%) Rs. 4000
Rs. 76000

* If the Dep. is not mentioned in the question we

assumed the Dep. On Furniture would be 5% p.a as
per Accounting Standard 6.
 Fixed Assets :-

Goodwill is a Non Tangible Asset.

No Depreciation is charged in Goodwill as per

Accounting Standard 6.
 THANK YOU

Kunal Kundu (A05)

Subhankar Dey (A13)
Subhamay Biswas (A14)