Can we capitalize material relocation expenses incurred on non-current asset?
First of all we must be clear about subsequent expenditures, criteria for capitalizing subsequent expenditures in carrying amount of non-current/fixed assets and relocation costs or expenses.
Subsequent expenditures refers to such costs which are...
What are the Fundamental accounting Assumptions underlying Financial Statements?
Fundamental assumptions, basic assumptions or fundamental accounting assumptions mean the accounting concepts that have been considered and followed while recording financial information. As information needs are different from person to person, entity to entity...
What is age, aged, ageing or aging analysis?
Age analysis is simply a time-based analysis with reference to due date to determine either how much time is left until due date or how much time has passed since due date. Most of...
How a loan repayment is disclosed in statement of cash flows?
First things first, a loan can be repaid in number of ways for example in cash, by handing over certain asset or converting debt to shares etc. But if the repayment does not involve...
What is Negative goodwill and its accounting treatment?
Goodwill has been defined under IFRS 3 as following:
An asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognised.
On analysing the...
When training costs can be capitalized?
It is correct that International Accounting Standards and especially IAS 16 Property, Plant and Equipment has specifically ruled out the capitalization of any expenditure incurred on training costs. You can read in more detail...
What is the difference between Material Misstatement and Material Inconsistency?
Material misstatement refers to such misstatements if present in the financial statements then the financial statements may affect the economic decisions of the users of financial statements. Material misstatements relates to the information included...
What is Folio coloumn and its use?
Folio, as in its literal meanings also, means a sequence of number of words for the purposes of dividing a book into meaningful parts or just for reference.
Same goes for its use in accounting...
What are the important Qualitative characteristics of Financial Statements?
As we understand that different users require financial information for assistance in their economic decisions. Entities publish financial statements so that users can get their information needs fulfilled.
The dependence of users' economic...
What is the objective of Financial Statements?
The basic objective of any financial statement is to fulfill information needs of the intended users. However, there are different kinds of financial statements for different purposes.
Broadly we can divide the financial statements in...