Académique Documents
Professionnel Documents
Culture Documents
direct expenses (raw materials, labor expenses, etc.) + indirect expenses (i.e.,
overhead administration/administrative personnel)
interest expenses (up to the moment that the asset is ready for use) can be included
offsetting expenses by means of accounts (60, 61, 62, 65, ) part of these relate to
the construction of the building, but there is a difference between expenses and
tangible fixed assets
60, 61, 62 operating expenses
72 Fixed assets Own construction (i.e., in order to offset operating expenses)
6503 Interests capitalized (-) (i.e., in order to offset interest/financial expenses); the minus
refers to a negative expense
Capitalized = recorded as an asset
These corrections are made in order to take them out from expenses, but keep the actual
expenses accurate.
We transfer the assets under construction to the tangible fixed asset account
We credit the account of assets under construction - cost of acquisition to close it
We debit the account of tangible fixed assets (e.g. 2210 buildings), for cost of
acquisition
The company buys the tangible fixed asset from itself => invoice => VAT paid to
itself => both VAT to be reclaimed and VAT due; you collect VAT from yourself to get
it from tax authorities, but in the end they offset each other so it doesnt matter on
the exam VAT is not expected to be shown
Cost of acquisition (continued)
assets under financial leasing will be discussed in the Liabilities chapter
parameters
depreciable amount
useful life
period of time
number of production output
depreciation method
alternative methods have been developed (cf. infra)
the appropriate method should be selected