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...

How can we change the Depreciation method?

Most of the non-current assets held by the entities require depreciation because of use devaluation as a result of use of the asset in business operations or other factors. Many different depreciation methods can be...

What is LISH inventory method?

LISH is the acronym for Last-in, Still-here and is basically just another name given to First-in, First-out (FIFO) method which is a well known inventory valuation method based on particular cost flow assumption. Different authors...

Is Drawings an expense account or a liability account?

In order to understand the nature of drawings account in accounting and why is it deducted from capital or equity total the better is that we look at the definitions of expense, liability and...

What is meant by Owner-occupied property in international accounting standards?

Owner-occupied property are such assets that are held by the entity for use in production or provision of services in the ordinary course of business. This is exactly those assets that are discussed under...

What is the difference between Cash basis and Accrual basis accounting and which one...

Accrual basis of accounting is one of the underlying assumption for preparing financial statements under International Accounting Standards. IASB Framework clearly demanded the financial statements to be prepared on accrual basis instead of cash basis...

What is Contingent rent in leases?

IASB's International Accounting Standard IAS 17 defines contingent rent as follows: Contingent rent is that portion of the lease payments that is not fixed in amount but is based on the future amount of a...

Is depreciation expense a fixed cost or a variable cost?

Let's revisit the terms Fixed cost and Variable cost and then we will discuss where depreciation cost/expense really fits. Fixed costs are such costs that do not change with the change in activity level (e.g....

What is the recognition criteria for subsequent expenditures incurred on non-current assets?

Subsequent expenditures refers to such costs which are incurred after the asset is recognized in the financial statement and brought to the location and condition intended. Examples of such expenditures include repair and...

Is Accumulated depreciation an expense account or an asset account?

Before this question is answered specifically it will be good if we clear an important connected concept of historical cost. According to historical cost concept, assets are recognized and reported in the financial statements at...