How cost of tangible fixed asset is determined?

Fixed assets or non-current assets can either be tangible or intangible and separate standards provide guidance on both. For most of the tangible fixed assets IAS 16 is considered whereas for most of the...

Is Warranty cost capitalized or included in cost of the asset?

Warranty in simple words is a promise by the manufacturer to make good of your loss under certain conditions. This helps win customers' confidence and is one of the major consideration in buyer's purchase...

How to record the disposal of revalued non-current asset?

Revalued non-current asset is the one that has undergone revaluation and now that asset is now measured on revaluation basis instead of historical cost basis. To learn more about revaluation model consult our IAS...

What is the accounting treatment of Grants related to Income (Revenue Grants)?

According to IAS 20 government grants are simply assistance to the entity by the government to give or help entity get economic benefits. Such assistance can help either in acquiring or building certain asset...

What is the accounting treatment of Preference shares and dividend in financial statements?

To determine the accounting treatment of preference shares and dividend on such shares, first you have to identify if preference shares are redeemable or irredeemable. Accounting treatment for redeemable preference shares If preference shares are redeemable...

What are different types of Shares?

Share is a document that represents a unit of ownership of the company in the hands of shareholder. In short, the shareholder has right of ownership to a certain extent determined in relation to...

What is Imputed cost?

Imputed cost mostly termed as opportunity cost or implicit cost is a more technical aspect of economic theory (economic problem). According to economic theory due to scarce resources investor cannot fulfill all what he wants...

What is Financial Instrument?

Financial instrument in essence is simply a contract that will ultimately result in financial asset in the hands of one party and corresponding financial liability in the hands of another party to the same contract. For...

How to account for Temporary Investment Incomes on funds from Specific borrowing?

It is a usual practice that if entity has borrowed funds to finance a qualifying asset then they might be invested temporarily until the funds are needed. This gives rise to a question if...

Is change in depreciation method a change in accounting policy or accounting estimate?

Depreciation method helps accountants in aligning the recognition of cost with the benefits rendered by asset as per the requirement of IAS 16 that requires rate of depreciation rate to match the rate at...
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