What are Tangible Fixed Assets?

Tangible Fixed Assets
Tangible fixed assets are required to be further classified into the following categories in the notes :
  1. Land
  2. Buildings
  3. Plant and equipment
  4. Furniture and fixtures
  5. Vehicles
  6. Office equipment
  7. Others (specifying nature)
  1. Assets under lease shall be specified separately under each class of asset.
  2. Leasehold land is disclosed under tangible fixed asset separately.
  3. Rly sidings can be disclosed in Plant & Machinery.
  4. The above sub-classification of tangible fixed assets is slightly different from the present one e.g., office equipment is a new category.
    • It is specifically provided that 'assets underlease shall be separately specified under each class of asset.' The reference is to fixed assets acquired by the company under finance leases and to those given by it under operating leases.
  5. Disclosures regarding reconciliation of opening and closing gross and net carrying amounts are similar to the present requirements except that impact of acquisitions through business combinations and impairment (or reversal of impairment) have to be separately disclosed.
  6. The term 'business combination' is not defined in the revised Schedule or in the Act or notified accounting standards.
    • One approach can be to consider amalgamations as per AS 14 as business combinations. An alternative view can be to refer to the definition of 'business combination' in Ind AS 103, Business Combinations i.e. "a transaction or other event in which an acquirer obtains control of one or more businesses".
    • Business has been defined in Ind AS 103 "an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs or other economic benefits directly to investors or other owners, members or participants".
  7. The disclosures relating to revaluation of fixed assets in revised Schedule are slightly different than those in the existing Schedule. However, in view of the over-riding requirements of AS 10, Accounting for Fixed Assets, the change is not significant.

No comments:

Post a Comment