AccounLlng SLandard 6

uepreclaLlon AccounLlng
JaL ls uepreciotion??
uepreciotion ls o meosote of tbe weotloq oot coosomptloo ot
otbet oss of vaue of a depreclabe asseL arlslng from use
and passage of Llme lL ls noLlng buL dlsLrlbuLlon of LoLa
cosL of asseLs over lLs usefu lfe
uepreclaLlon ls glven by
vaue of Le asseL scrap vaue
______________________________
1oLa number of years
*uepreclaLlon means permanenL fa ln Le vaue of Le asseL
lsLorlca cosL depends on
1 Money pald/ payabe Lo supplers
2 CosL of LransporLaLlon
3 lnsLaaLlon and commlsslonlng carges
4 CosL of any addlLlons or lmprovemenLs
1e usefu lfe depends on
1 yslca deLerloraLlon
2 1ecnooglca obsoescence
3 Lega conslderaLlons Le eco lfe ls generay bounded by ega
lfe of an asseL daLe ls ofLen muc sorLer lL ls common ln d
eecLronlc fled for Le Lecnoogy Lo become obsoeLe ln as lLLe
as 3 yrs ofLen we before Le paLenL explres
4 CLers suc as lnadequacy
uepreclabe AsseLs
AsseLs lncuded
W Are expecLed Lo be used for more Lan one
accounLlng perlod
W ave a lmlLed usefu lfe
W Are ed for use ln producLlon of goods and
servlces
uepreclabe AsseLs
AsseLs excuded
W loresLs anLaLlons
W JasLlng AsseLs Mlneras and naLura Cas
W LxpendlLure on researc and deveopmenL
W Coodwl
W LlvesLock CaLLe eLc
MeLods for CacuaLlng uepreclaLlon
1e 2 MeLods as
1 JrlLLen uown vaue MeLod
2 SLralgL Llne MeLod
Cange ln meLod of depreclaLlon
Can be made ln Le elLer slLuaLlons
1 A cange ln meLod ls necesslLaLed by
SLaLuLe or a SLandard
C8
2 lL woud resuL ln more approprlaLe
preparaLlon or presenLaLlons of lS
uepreclaLlon polcy
W rlnclpe Le carge of depreclaLlon Lo
revenue ls Lo maLc Le cosL of asseL wlL Le
revenue lL produces
W 8ased on
1 Lype of asseL
2 naLure of lLs use
3 oLer clrcumsLances prevallng ln Le buslness
lacLors for cange ln measuremenL of
depreclabe amounL
W Cange ln lsLorlca cosL
W lsLorlca cosL subsLlLuLed due Lo revauaLlon
W Cange ln esLlmaLed usefu lfe
W Cange ln esLlmaLed resldua vaue
ulscosures
W 1oLa cosL of eac cass of asseLs
W 1oLa depreclaLlon for Le perlod of eac cass of
asseLs
W uepreclaLlon MeLod
W AccumuaLed depreclaLlon of eac cass of asseLs
W uepreclaLlon raLes
W LffecL of revauaLlon of Le flxed asseL on Le amounL
of depreclaLlon
AccounLlng SLandard 10
AccounLlng for llxed AsseLs
ccountinq 5tondord defines lixed ssets os
# An asseL ed wlL lnLenLlon of belng used for
Le purpose of produclng goods or servlces
and ls noL ed for sae ln Le norma course of
buslness"
CaLegorles for llxed AsseLs
1anglbe AsseLs
lnLanglbe AsseLs
llxed AsseLs
Tangible Asset:
Land 8uldlngs anL and Maclnery velces lurnlLure and llLLlngs
ntangible Asset:
Coodwl aLenLs 1rademarks and ueslgns
Lxcuslons
1 lnfaLlon AccounLlng
2 CerLaln Speclflc lLems
3 lnLanglbe asseLs
4 Covered by oLer sLandards
llxed AsseLs ln llnancla SLaLemenL
1e llxed AsseLs sa be sown ln flnancla
sLaLemenL aL Lelr lsLorlca cosL or revaued
prlce
lstotlcol cost fot llxeJ Asset
W urcase rlce
W lmporL duLles CLer nonrefundabe Laxes
W Any dlrecLy aLLrlbuLabe cosL of brlnglng Le
asseL Lo Le worklng condlLlon for lLs lnLended
use
lstotlcol cost of selfcoosttocteJ llxeJ Assets
W CosL are dlrecLy reaLed Lo Le speclflc asseL
W CosLs LaL are aLLrlbuLabe Lo Le consLrucLlon
acLlvlLy
W Any lnLerna proflL lncuded ln Le cosL soud
be elmlnaLed
8evaued rlce
8evauaLlon of AsseL
uecrease
ln vaue?
CrrevauaL
lon
llrsL 1lme
revlousy
8evaued
lncrease ln vaue? Cr
uecrease ln vaue?
lncrease ln
vaue?
Carge Lo
8evenue
lncrease uecrease lncrease uecrease
CosL of AsseL acqulred ln excange of
exlsLlng AsseLs
loowlng are Le slLuaLlons
W llxed AsseL Lxcanged noL slmlar
W llxed AsseL Lxcanged are slmlar
W llxed AsseL acqulred ln excange of sare or
oLer securlLles
vauaLlon of llxed AsseLs ln specla cases
W AsseLs acqulred on lre purcase
W CosL of !olnLy ed asseLs
W llxed AsseLs acqulred aL consoldaLed prlces
lmprovemenLs and 8epalrs
1ere are Lwo accounLlng LreaLmenLs ln case of
lmprovemenLs and 8epalrs Lo llxed AsseLs
W lf fuLure beneflLs do noL cange
W lf fuLure beneflLs lncrease's beyond Le
prevlousy assessed sLandard performance
8eLlremenL ulsposas
1ere are Lwo posslbllLles wle dlsposa
W llxed AsseLs are reLlred from acLlve use and
ed for dlsposa
W ulsposa of prevlousy revaued flxed asseLs
ulscosure
W Cross neL book vaues aL Le beglnnlng and
aL Le end
W LxpendlLure lncurred course of consLrucLlon
or acqulslLlon
W 8evaued amounL
resenLed 8y
W lswlnder Arora
W ankurl !aan
W nlkl kadam
W nlLlsa Slna
W Monlka !aln
W Abl[lL rasad
W Saas uesmuk
8eferences
W AccounLlng SLandards
wwwlcalorg
W AccounLlng SLandards uS 8awaL
1ank you ! ! ! !