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AS - 10 PROPERTY PLANT & EQUIPMENT

Published in: Accountancy | Accounts
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  • Vivek K

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As 10 is for CA Inter & CA Final. Here I am uploading Part 1 of this standard.

  • 1
    PROPERTY, PLANT AND EQUIPhÆNT {AS-10) REVISED What are Property, Plant and Equipment (PPE) ? The Property, Plant and Equipment (P PE) also generally known as fixed assets; these fixed assets are tangible property in contrast to the intangible property which is dealt by another AS—26. These tangible assets are : 0 Held for use in production or supply of goods and services, others, or for administrative purposes. 0 Expected to be used during more than one period. 0 Not held for sale in the normal course of business. The examples of Property, Plant and Equipment (P PE) are land, for rental to building, plant and machinery, furniture and fitting and office equipment etc. The principal issues in accounting for P PE are: Objective 0 The recognition of the assets, 0 Determination of their carrying amounts, and o The depreciation charges and impairment losses to be recognised in relation to them. Scope 0 This Standard prescribes the accounting for P PE except when another AS permits different accounting treatments . This Standard does not apply to (a) Biological assets related to agricultural activity other than bearer plants. This Standard applies to bearer plants but it does not apply to the produce on bearer plants (bearer plants is explained in next Para) (b) Wasting assets including mineral rights, expenditure on the exploration for and extraction of minerals, oil, natural gas and similar non—regenerative resources . However, this Standard applies to items of property, plant and equipment used to develop or maintain the assets described in (a) and (b) above. Investment property is an investment in land or buildings that are not intended to be occupied substantially for use in the operations of the investing enterprise. The investment property is not P PE and it should be accounted for only in accordance with the cost model prescribed in this Standard.
  • 2
    What is biological asset, Agriculture activity , plant?— The standard defines these terms as under: Agricul ture produce and bearer 0 Biological Asset is a living animal or plant and is core income producing asset of agricultural activity, therefore not covered by P PE. 0 Agricultural Activity is the management by an enterprise of the biological transformation and harvest of biological assets for sale or for conversion into agricultural produce or into additional biological assets. 0 Agricultural Produce is the harvested product of biological assets of the enterprise. o Bearerplant is a plant that: (a) is used in the production or supply of agricultural produce; (b) is expected to bear produce for more than a period of twelve months; and (c) has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales. END OF PART 1

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