Why amortisation of goodwill is not permissible?
Before IFRS 3 was introduced, entities were allowed to amortize goodwill. However, after it was introduced back in 2004-2005, amortization of goodwill was strictly...
What is french straight line method of depreciation?
French straight line depreciation method is not completely a new method to calculate depreciation. Rather it is more of a derivation or extended version of...
What is ‘Declining balance to Straight line crossover’ method of depreciation?
Majority of the students studying accounting, either at initial stages or experienced in accountancy academics, are familiar with two of the most renowned depreciation...
What is complex asset or separate component asset?
An asset that consistes of different components and each component is significant in relation to the cost of the asset then such assets are...
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...
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...
What is the difference between Complex asset and Cash generating unit?
To keep things simple, complex asset (or also known as separate component asset) and cash generating unit (CGU) is more of a concept rather...
Can we capitalize Tax amounts?
According to IAS 16 the purchase price of the asset includes the amount of non-refundable taxes i.e. such taxes which cannot be claimed back...
Why Training Costs are not capitalized as cost of the asset?
First of all not every directly attributable cost can amount to capitalization as cost of the asset. IAS 16 requires more than just a...
Why don’t we revalue current assets like non-current assets?
Concept of revaluation of assets is usually associated with non-current assets only. The main reason why the term 'revaluation' is just attached with non-current...