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Articles tagged with: DEPRECIATION


[28 Dec 2009 | 9 Comments | 3,895 views]
Fixed Asset Capilization

Dear all
Seasons greetings!!
We have purchased a fixed asset with value of USD 100,00/- specifically at the request of our client. We had the same equipment, but the client need two instead of one and the client agreed to reimburse the cost of additional one, once we install the same on site.
I just want to know whether I can capitalise the equipment as fixed asset in my books of account and claim depreciation on the asset.
The asset will be in our name and we are the owners of the asset. …

IAS 16, IAS 38 »

[14 Feb 2009 | One Comment | 3,921 views]

Dear Experts,
If an asset is purchased from a supplier for which payment is to be made in 3 years on monthly instalments including cost + finance chg. Can we show assets and Capex loan in B/S and depreciation on assets can be charged.

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[9 Feb 2009 | 3 Comments | 8,321 views]

My company made the following aentriess for revaluation of fixxed assets
Fissed assets Dr
Revaluation AC cr
At the end of the year entries made for dep. are as follows:
Depreciation Account Dr
Fixed assets
(With full value of the assets)
Revauation reserve accounts dr
Depreciation accounts
Depreciation for revalued amount
Depreciation account Dr
Profit and loss account
Revalued depriciation charged to Profit and loss account
Any one can help me whether the transaction are correct or what will be the correct entries. please suggest me with example

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[15 Dec 2008 | No Comment | 3,743 views]

Dear all
Can someone tell me how do you define normal capacity of IAS 2?
In IAS 2, it said that normal capacity is the production expected to
be achieved on average over a number of periods or seasons under
normal circumstances.
I am wondering how to caculate the normail capacity?
ex: one machine can produce 10 finish good in 8 hours, then, the
factory works 8 hours per days and five days per week, so the normal
capacity will be
10 *8*4=320 ?
or the enterprise estimate that they can sell 250 finish goods per
months in normal circumstances. so, …


[15 Dec 2008 | No Comment | 2,906 views]

Dear All
In UAE work visa would be for 3 years and cost would be paid by the
employer and in my company it is practice to debit as administration
expense. Employees must has to complete 3 years and if he/she leave
the job prior to three years he has to pay back the full visa cost to
In my opinion it should be capitalized and depreciated for three years
to meet fair presentation of financial reporting standard.
Please suggest appropriate treatment

Dear Ahmad,
I think you should put the cost in prepayments and write-off against
admin expenses during the …


[15 Dec 2008 | No Comment | 3,472 views]

dear sir or mam
When one company adopt the IFRSs 1 first time then what are the irems exempted from national GAAP in the case of convergance to IFRSs.
Sincerely yours,

dear rakesh

pls read ifrs 1 and see the exemption given for the same
there are 10 exemptions


We have a projector & purchased 6 years back @ 17000/- we have depreciated 8000/- as of now and the NBV is 9000/-. Now the market value is 5000/-. Do we need any accouning treatment as per IFRS.

Dear Upul,
IAS 16, Property, Plant and Equipment (PPE), allows a choice …


[15 Dec 2008 | No Comment | 13,563 views]

Can any one help me for calculation of deferred tax under deductable timing diference
Example: writeen down value of fixed assets as pert accounts-200
         writeen down value as per tax                      150
please privide the soluision by giving effects in the profit and loos accounts and balance sheet. The company going to introduce deferred tax in first time

Here is the solution::
U need to calculate PGBP in following manner taking into consideration timing differences :
PBT as per P & L a/c …


[15 Dec 2008 | No Comment | 10,706 views]

Dear all,
As I know , as per IFRS there is no prior year adjustment anymore ,
and back dated entries are not allowed once the year closed and
figures reported , Hence the actual variance will be booked in the
next year PL ,
example : if company A , estimated an income in 2007 and took a
provision for this income for 1M $ in 2007
The actual income received in 2008 for 2M$ , the
accounting entry will be reversing the 1M$ provision and Book the 1M$
variance in 2008 PL
My question is , As per …

IAS 16, IAS 38, IFRS, TAX »

[14 Dec 2008 | No Comment | 1,088 views]
Date of comercial production

Dear all,
can anyone please guide me if there are any guidelines as to establish
date of commercial production in a manufacturing concern in IFRS.
thanks and regards

Hi Deepak,
I assume you are inferring to either intangible assets.
There is n…


[28 Aug 2008 | No Comment | 2,034 views]

Dear All

Can you please help me in allocating derection in the followin scenario

In a glass industries one main machine is being used to produce mould and how we can allocate that depreciation of main machine either on the basis of apportionment or fully we will charge that depreciation to either main plant or to mould cost.

What will be the accounting  entries in this case.


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[28 Aug 2008 | No Comment | 4,016 views]

I read this statement some where:
The purposes of a quasi-reorganization are to restate overvalued assets to their lower
fair values (and thus reduce future depreciation) and to eliminate a retained earnings
deficit (and thus facilitate the declaration of dividends).
How overvaluing  assets to their lower fair values will reduce the current deficit???
Although it will reduce the future deprecistion??

Maybe there are revaluation surpluses under equity that can be transferred to the deficit while impairing the overvalued assets?
Kind regards,

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[28 Aug 2008 | No Comment | 4,578 views]

I would like to know weather or not it is permissible to issue bounce shares against reserve created out of revaluation of fixed assets, with references. If not, can the revaluation reserves be used for any purpose before the sale/ de-recognition of the fixed asset

No, the revaluation reserve is restricted to use for revaluation increases and decreases only, see IAS 16 PPE sub 39 – 41, only when assets are sold, the whole surplus will be realized in the income statement or when depreciated, that part may be released to …


[27 Aug 2008 | No Comment | 2,376 views]

I have just recently starting working in a country that is about to adopt IFRS (2009) and was wondering if anyone had had experience with possible violations to debt covenants during the transition period. I am guessing that clients will have to communicate with their banks about the impact IFRS will have on their outstanding debt and request a document stating that the banks will request the payment on demand in the case of a violation.
I am not sure if clients have realized this potential impact of going to IFRS, but …