Premium Essay

Tangible Fixed Assets

In: Business and Management

Submitted By Finiki
Words 21570
Pages 87
ACCOUNTING STANDARDS BOARD

FEBRUARY 1999 FRS 15

FIXED ASSETS

ACCOUNTING
STANDARDS
BOARD

FINANCIAL REPORTING

TA N G I B L E

STANDARD

15

Financial Reporting Standard 15
‘Tangible Fixed Assets’ is issued by the Accounting Standards Board in respect of its application in the United Kingdom and by the Institute of Chartered
Accountants in Ireland in respect of its application in the Republic of Ireland.

FIXED ASSETS

ACCOUNTING
STANDARDS
BOARD

FINANCIAL REPORTING

TA N G I B L E

STANDARD

15

Financial Reporting Standard 15 is set out in paragraphs 1-110.
The Statement of Standard Accounting Practice, which comprises the paragraphs set in bold type, should be read in the context of the Objective as stated in paragraph 1 and the definitions set out in paragraph 2 and also of the Foreword to Accounting Standards and the Statement of Principles for Financial Reporting currently in issue.
The explanatory paragraphs contained in the FRS shall be regarded as part of the Statement of Standard
Accounting Practice insofar as they assist in interpreting that statement.
Appendix IV ‘The development of the FRS’ reviews considerations and arguments that were thought significant by members of the Board in reaching the conclusions on the FRS.

©The Accounting Standards Board Limited 1999
ISBN 1 85712 079 5

ACCOUNTING STANDARDS BOARD FEBRUARY  FRS 

CONTENTS
Paragraphs

SUMMARY
FINANCIAL REPORTING STANDARD 15

Objective
Definitions
Scope
Initial measurement
Cost
Finance costs
Disclosures—finance costs
Recoverable amount
Subsequent expenditure
Valuation
Frequency
Valuation basis
Class of assets
Reporting gains and losses on revaluation
Reporting gains and losses on disposal
Disclosures
Depreciation
Depreciable amount
Review of useful economic life and residual value
Renewals…...

Similar Documents

Premium Essay

Financial Ratio

...Exp /  Current Portion of LT Debt Leverage Ratios * Fixed Assets / Tangible Net Worth * Debt to Tangible Net Worth | Operating Ratios and Indicators * Gross Profit Margin * EBT / Tangible Net Worth * EBT / Total Assets * Fixed Asset Turnover Ratio * Total Asset Turnover Ratio * E.B.I.T.D.A. ("Ebitda") Expense to Revenue Ratios * % Depreciation, Depletion & Amortization / Revenue * Officers' &/or Owner's Compensation / Revenue Ratio Fusion! * Altman's Z-Score for Privately Held Firms | Banks often use ratios in loan contracts with benchmarked minimums or maximums (aka 'Covenants').  Even if covenants are not listed in your loan contract, banks still look at them.  You will add credibility to your financial statements if you include financial ratios and indicators in your presentation to the bank. They will think you use these indicators internally, and they'll love you for it!  Actually; If you're not using Financial Analysis Tools and Benchmarks internally, you should strongly consider it.  LIQUIDITY RATIOS Liquidity ratios indicate the company’s ability to meet its short term obligations. * The Current Ratio is calculated by dividing current assets by current liabilities. If current assets are greater than current liabilities, the current ratio will be greater than 1.0.  * The Acid Test Ratio compares Current Liabilities to Current Assets that can be quickly converted to cash. Here is an......

Words: 1442 - Pages: 6

Premium Essay

Financial Analysis

...information about assets, liabilities and owners equity. The balance sheet let us say prepared on 31.03.11, reveals the firm’s financial position on a particular date. It provides snapshot of the financial position of the firm at the close of accounting period. Assets - Assets are valuable economic resources owned by the firm and measured in monetary terms. Assets represent a) stored purchasing power (e.g. cash), b) money claims (e.g. receivables and investments) c) tangible and intangible items which can be sold or used in business. Tangible items include land, building, plant, equipments, stocks and all other items which have physical substance. Intangible items do not have physical existence but they have value to the firm and include items such as patents, copyrights, trade names or goodwill. The assets are classified as: 1) current assets and 2) fixed (long term) assets. Current assets also sometimes called as liquid assets, are those resources of the firm which are likely to be converted into cash during the accounting period or operating cycle of the business. Operating cycle is the time taken for converting cash into raw material, convert raw material into finished goods, sale finished goods, and convert receivables into cash. Current assets include – cash, raw material, stock-in –process, finished goods, trade debtors, tradable securities, consumables and spares. (Level of current assets – trade off between profitability and liquidity) Fixed assets are......

Words: 1649 - Pages: 7

Premium Essay

Real Asset vs Financial Assets

...:INVESTMENT ALTERNATIVES * Types of assets that investors can invest in; financial assets and real assets * * Financial assets: are claims that organizations sell in order to finance their financial needs. Examples of financial assets are shares, bonds, certificate of deposits, unit trust. * Real assets: consists of tangible assets such as investment in real property, precious metal, gems, antiques, stamps, coins and work of arts. Real Asset vs Financial Assets Types | REAL ASSETS | FINANCIAL ASSET | Characteristics | Tangible asset/physical capital that generate income | Claims of organization sell in order to finance their financial needs t | Advantages | * It can be used to produce goods and service s * Owning a real tangible asset that has both investment and aesthetic value | * It has an efficient market for trading * High liquidity * Easy to transfer ownership | Disadvantage | * Lack of an efficient and limited market * Hard liquidate * High commission charged | * Must go through broker (middleman) to get access into the market | Example | * Real property ( house, land, machine, gold, antiques) | * Shares, bonds, certificate of deposit ,unit trust, commodity, derivative instruments | Savings * Form of fixed investment where principal amount and terminal amount is known. ADVANTAGES | DISADVANTAGES | * Provide security * Earn interest on savings * High liquidity | * Earn low income * Hard......

Words: 515 - Pages: 3

Premium Essay

Leader

...Types of Assets Used by Companies Garzoria, Raul Principles of Accounting 2311 Ruby Campuzano, M.S. Abstract Assets are resources owned by a company as the result of transactions and are recognized by being an economic resource to a business that adds value. Assets should hold future economic value for the owner or business. Types of Assets Used by Companies An item owned by individuals or corporation that holds some type of economic value that in turn can be converted into cash, is an asset. Assets equal the sum of total resources for that particular business as opposed to liabilities. A few examples are office equipment, vehicles, cash, real estate, and other property owned by the business. In a business accounting point of view, there are different types of assets used, such as current, long-term, intangibles, property, plant, and equipment. This list is basically items that hold cash value, which bring in income to the business. Current assets are important to most companies as a source of funds for day-to-day operations. This asset considered as work in process or cash that’s always flowing in and out of the business. A balance sheet item which equals the sum of cash and cash, accounts receivable, inventory, marketable, prepaid expenses, and other assets that could be converted to cash in less than one year. Creditors of a company, will often be interested in how much that company has in current assets, so that if the company goes bankrupt; the......

Words: 883 - Pages: 4

Premium Essay

Analysis of Different Gaap in Property Management

...accounting principles in valuing assets, which are fair value and historical cost. The property refers to the land and building, as those are the main part of total fixed assets of a company. Asset is the most important element in the balance sheet, hence the method used for assets valuation is very important to avoid over or under estimation. This is the reason why the choice for measurement method is importance in determining the value of assets because it will affects the acquisition price and the comprehensive income of the firm in terms off income and shareholder equity. The author too focuses on the accounting treatment in accordance to International Financial reporting Standard (IFRS), US GAAP and Greek GAAP. With reference to the article, asset can be defined as a good able to provide a constant flow of services such as housing services and a source of cash flow. Assets are ruled by a set of basic aspects such as the cost (cost of land or construction cost), the residual value, the useful life estimation and depreciation charge. These elements are correlated with the type and use form of assets. The author also apply some accounting principles in their study such as prudence, historical costs, substance over form, going concern, true and fair view and many more. Data Methodology/approach The topic is approach by using an integration of fixed assets into four main portfolio categories, which are for own use, investment, held for sale assets and inventories. The......

Words: 1839 - Pages: 8

Premium Essay

Time Pass

...1. Company background: Mention the sectors that the company operates in, main products/brand names, market share, geographies of operations, new developments, main competitors etc. Which business segment and/or geographical segment - generates most revenues, is the most profitable, employs the most capital & tangible assets 2. Company Management: Board Size & Composition –is the board diverse enough with reference to Gender, Age, Educational Background, Experience, independence etc. Has the company expanded board size? Compensation to directors – as % of revenues & increase over last year. How many Board meetings were held during the year? Do these directors also hold directorships in other companies? 3. Shareholders: Issued Share Capital : No of shares & par value -Rs10. 2009: 88,81,26,020 2010: 96,01,26,020 2011: 97,21,26,020 2012: 97,21,26,020 2013: 97,21,26,020 Has the company issued any shares during the year? Yes in 2009, 2010 and 2011 How & to whom were they issued? 2009: CCPS were compulsorily converted into 91,211,001 Ordinary Shares of Rs. 10 each at a premium of Rs. 590 per share on 1st September, 2009. 2010: 1,50,00,000 Ordinary Shares of ` 10/- each at a premium of ` 584/- per share aggregating to ` 891 crores The Company completed a follow-on public issue of 5,70,00,000 Ordinary Shares of ` 10/- each at a price of ` 610 per share (including premium of ` 600 per share) aggregating to ` 3,477 crores. The Ordinary Shares...

Words: 2094 - Pages: 9

Premium Essay

Dsfadsgsda

...December 31, 2014 the Kareni B.V, profit and loss account for the year ended December 31, 2014 Other lnformation and profit appropnation Report of the Auditors Company.info Kareni B.V. REPORT OF THE DIRECTORS The report nf tfie Director Date 10 April p(l I Company.info I; ho Itoard uf Directorc : wilt he availahle for in'pection at tlio office of the cornpany Kareni B.V. CONSOLIDATED BALANCE SHEET AS AT DECEMBER 31, 2014 (before appropriation ASSETS of result) 31 december 2013 31 december 2014 FIXED ASSETS INTANGIBLE FIXED Goodwill Development ASSETS costs, Customer Lists, Trade Marks 9 572.011 2 745 260 3 190 670 4. 11 5. 795 7.306.465 TANG IBLE FIXED Buildings Machinery Equtpment 12.317 271 ASSETS 9,075.460 2.410.044 637,958 77,476 9 646 262 2.468,589 932.168 240.370 Vehicles 13 287.389 FINANCIAL FIXED 12 200 938 5.218 5.218 ASSETS Investments CURRENT ASSETS STOCK 1 DEBTORS Trade debtors Taxation and sociaal secunty costs Deferred Taxation Qther debtors Prepayments and accrued income 9.990.31 5 1 42. 787. 277 3.332. 546 34. 875. 890 3.931.069 1 389.029 2.499 673 2,015.145 6. 1 31.641 1.903.01 7 1.514.180 52.023.670 Company.info IN HAND 230 094 9.26 B. 397 1 0 0. 843. 1 51 CASH AT BANK AND 42.224 156 92.147.621 8 Kareni B.V. CONSOLIDATED BALANCE SHEET AS AT......

Words: 4083 - Pages: 17

Premium Essay

Current Assets

...Assets are formally controlled and managed within larger organizations via the use of assets tracking tools. These monitor the purchasing, upgrading, servicing, licensing, disposal etc., of both physical and non-physical assets. Current assets Current assets are cash and other assets expected to be converted to cash or consumed either in a year or in the operating cycle (whichever is longer), without disturbing the normal operations of a business. These assets are continually turned over in the course of a business during normal business activity. There are 5 major items included into current assets: 1. Cash and cash equivalents — it is the most liquid asset, which includes currency, deposit accounts, and negotiable instruments (e.g., money orders, cheque, bank drafts). 2. Short-term investments — include securities bought and held for sale in the near future to generate income on short-term price differences (trading securities). 3. Receivables — usually reported as net of allowance for noncollectable accounts. 4. Inventory — trading these assets is a normal business of a company. The inventory value reported on the balance sheet is usually the historical cost or fair market value, whichever is lower. This is known as the "lower of cost or market" rule. 5. Prepaid expenses — these are expenses paid in cash and recorded as assets before they are used or consumed (common examples are insurance or office supplies). See also adjusting entries. Marketable...

Words: 558 - Pages: 3

Premium Essay

Accounting

...Group 8 Tutors name:mariano scapin PART B Tangible non-current assets are widely existed in many kinds of companies, however, there is question that different companies value similar assets very differently, this essay will elaborate this phenomena in details through referring to some companies. Tangible non-current assets like property, plant and equipment are initially recorded at acquisition cost, it means all costs directly attribute to bringing the asset into working condition, and they have a fundamental influence on the amount of depreciation as a depreciation base. Generally speaking, in the case of the serve life of tangible non-current assets is fixed, the depreciation will be higher if the there is a higher acquisition cost. Further more, the net residual value can also influence the depreciation, if the tangible non-current assets have higher net residual value, correspondingly, the depreciation in unite time or unit labour force will be lower, because net residual value is an estimator at the beginning about the whole serve life has completed in the future, so the real amount can only be confirmed when it really happens, hence it is subjective to some extent and it will lead to companies value similar assets very differently. There are also many other factors which can influence the value of tangible non-current assets. Through referring to the example in Enigma, on the one hand, the company revalued......

Words: 653 - Pages: 3

Premium Essay

Financial Report

...and Retained Profits | |30,000,000 | |15% Term Loans | |30,000,000 | | | |68,000,000 | |Non-current Assets |40,500,000 | | |Less: Depreciation |13,500,000 |27,000,000 | |Current Assets | | | |Inventories |24,000,000 | | |Sundry Debtors |30,000,000 | | |Other Current Assets |1,800,000 | | |Cash at Bank |800,000 | | | |56,600,000 | | |Less: Current......

Words: 1838 - Pages: 8

Premium Essay

Exxon Mobile Analysis

...supply the world’s growing demand for energy” (pg. 5). Exxon continues to deliver “superior results” to its shareholders. As I looked over Exxon’s summary annual report for 2011 and 2012, it was clear that the majority of the oil company’s assets were tangible. According to Investopia.com (2014) tangible assets are “assets that have a physical form…they include both fixed assets, such as machinery, buildings and land, and current assets, such as inventory.” Both the 2011 and 2012 summary annual reports have the majority of its tangible assets in its property, plant and equipment portion of the balance sheet. Exxon Mobil Corp.'s current, quick, and cash ratios improved from 2011 to 2012. The company’s Net Income was $41,060, 000 (2011) to $44,880, 000 (2012), which is a positive move and an increase of $3,820,000 or a little of 9%. Cash flows for the same period moved negatively, about $11,305,000 or a little over 65%. The cash flow statement is broken down into three different categories, such as, operating activities, investing activities, and financing activities. Operating activities are activities from Exxon’s normal dialing activities. Investing activities are cash inflow and outflow that comes from the company’s investments in fixed assets or marketable securities. And financing activities would include inflows and outflows of cash that come from all long and short term debt and dividends that are due. This by no means has negatively affected the overall health of the......

Words: 654 - Pages: 3

Premium Essay

Apc311

...(14) (16) (18) 99 120 104 Other income 16 26 29 Finance cost (8) (8) (9) Bad debts (3) (6) (4) Finance income from credit sales 1 3 3 Profit before tax 105 135 123 Tax expense (26) (34) (31) Profit for the period 79 101 92 Balance sheets as at 31 March 2012 2013 2014 £m £m £m Intangible Fixed Assets 37 42 50 Tangible Fixed Assets 175 204 214 Inventory 235 308 292 Receivables 103 139 168 Cash 54 53 44 604 746 768 Share capital 80 80 80 Reserves 219 220 212 299 300 292 Long-term loans 75 173 184 Trade payables 55 71 71 Liability to the bank: short-term loans 75 97 91 overdraft 100 105 130 604 746 768 Required (a) Calculate the financial ratios for each of the categories Revenue, Profitability, Liquidity, Efficiency, Gearing and Investment. (9marks) (b) Discuss the purpose of each category of financial ratios and the Company’s performance for the years 2012 to 2014. (15marks) (c) Calculate net cash flows from operations using the indirect method and discuss the results in terms of the liquidity of the company to support a larger overdraft or a long term loan. (10marks) Total (34marks) PART C Discuss Intangible Fixed Assets and Tangible Fixed Assets using the appropriate International Accounting Standards, incorporating the relevant regulations with the use of examples and extracts where appropriate. (33 Marks) Grand Total (100 marks/100%)...

Words: 403 - Pages: 2

Premium Essay

Accounting Notes

...period 5. Concervatism / Prudence – расчетливость, практичность 6. Materiality Principles of accounting 1. Reliability 2. Historical Cost Basis – assets and rights of the Company are accounted for at their historical or production cost 3. Revenue – the company should establish rules when the revenue must be recognized and subsequently recorded. In accrual accounting revenue is recognized when the products are already delivered. 4. Matching – its important to link the income of the period with the costs incurred for that income. 5. Consistency 6. Disclosure – states that the company should present enough information to form an opinion about its performance. Accounting assumptions * Separate-Entity assumption * Unit-of-measure assumption * Continuity assumption (Going-Concern) ACCOUNTING EQUATION Assets = Liabilities + Shareholder´s equity Equity means where financing is coming from. Assets shows where this financing is going. Assets – properties and rights owned by the company. (economic point of view) Assets – the use of company funds. (financial point of view) Liabilities and Shareholders´ equity – debts. The difference lies in who finance the company – shareholders or owners. Sum of liabilities and shareholders´ equity should be always identical to amount of assets. FINANCIAL STATEMENTS * Income Statement Key elements – revenues and expenses. Depending on a relationship between these company reports net......

Words: 1584 - Pages: 7

Premium Essay

Dasd

...Alaska Sea Grant Marine Advisory Program The Business of Fish Handout 6 Analyzing Your Financial Ratios Taken from http://www.va-interactive.com/inbusiness/editorial/finance/ibt/ratio_analysis.html Overview Any successful business owner is constantly evaluating the performance of his or her company, comparing it with the company's historical figures, with its industry competitors, and even with successful businesses from other industries. To complete a thorough examination of your company's effectiveness, however, you need to look at more than just easily attainable numbers like sales, profits, and total assets. You must be able to read between the lines of your financial statements and make the seemingly inconsequential numbers accessible and comprehensible. This massive data overload could seem staggering. Luckily, there are many well-tested ratios out there that make the task a bit less daunting. Comparative ratio analysis helps you identify and quantify your company's strengths and weaknesses, evaluate its financial position, and understand the risks you may be taking. As with any other form of analysis, comparative ratio techniques aren't definitive and their results shouldn't be viewed as gospel. Many off-the-balance-sheet factors can play a role in the success or failure of a company. But, when used in concert with various other business evaluation processes, comparative ratios are invaluable. This discussion contains descriptions and examples of the eight......

Words: 3880 - Pages: 16

Premium Essay

Corporate Finance

...receivable = $115,000; tangible net fixed assets = $1,660,000; inventory = $301,000; notes payable = $120,000; accumulated retained earnings = $1,246,000; long-term debt = $861,000. (Be sure to list the accounts in order of their liquidity.) CORNELL COP. Balance Sheet Assets Cash Accounts receivable Inventory Current assets Tangible net fixed assets Intangible net fixed assets Total assets Liabilities Accounts payable Notes payable Current liabilities Long-term debt Total liabilities Common stock Accumulated retained earnings Total liabilities & owners' equity $ 220,500 120,000 $ 340,500 861,000 $ 1,201,500 401,500 1,246,000 $ 2,849,000 $ 143,000 115,000 301,000 $ 559,000 1,660,000 630,000 $ 2,849,000 Worksheet Learning Objective: 02-01 The difference between accounting value (or “book” value) and market value. Prepare a 2011 balance sheet for Cornell Corp. based on the following information: cash = $143,000; patents and copyrights = $630,000; accounts payable = $220,500; accounts receivable = $115,000; tangible net fixed assets = $1,660,000; inventory = $301,000; notes payable = $120,000; accumulated retained earnings = $1,246,000; long-term debt = $861,000. (Be sure to list the accounts in order of their liquidity.) CORNELL COP. Balance Sheet Assets Cash Accounts receivable Inventory Current assets Tangible net fixed assets Intangible net fixed assets $ 143,000 ± 2% 115,000 ± 2% 301,000 ± 2% 559,000 ± 2% 1,660,000 ± 2% 630,000 ± 2% $ Total assets Liabilities......

Words: 3673 - Pages: 15