Accounting for Assets
An intangible asset is an identifiable non-monetary asset without any physical substance. Some intangible assets may have physical substance – for example a software CD or legal documents in the case of licenses and patents. In such a case, judgement is necessary to determine the more significant element. A resource controlled by the entity, as a result of past events where future economic benefits will flow to the entity.
PPE and intangible assets are recognised initially at cost. Costs includes all expenditure directly attributable to asset location and intended use – this is done with the model. For more information contact [email protected] PPE and intangible assets have to be depreciated and amortised. The most common methods of depreciation and amortisation are the straight line and the reducing balance methods.
An asset can be derecognised when it is held for sale, disposed of, or permanently withdrawn.
a) Disclosure for each class of PPE: Measurement basis used for determining gross carrying amount, depreciation methods used, useful lives or depreciation rates used. The gross carrying amount and accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of each period, a reconciliation of carrying amount at the beginning and end of each period.
b) Reconciliation must include: Additions, assets classified as held for sale or included in a disposal group and other disposal , acquisitions through business combinations, increases or decreases resulting from revaluations and impairment losses recognised or reversed through OCI, impairment losses recognised and reversed through profit or loss, depreciation, effect of currency translation differences (from functional to presentation currency), other changes.
Investment Property is property that is land or building (or part of a building), or both, is held through ownership or finance lease for rental, or held for capital appreciation but not held for use in production, supply of goods / services or for administration and held for sale in the ordinary course of business. Entity’s intentions – should be the primary criterion to consider when determining whether classification as investment property is appropriate. For more information contact [email protected].
The investment property is initially measured at cost, while investment property is subsequently measured at fair value of at cost.
The investment property is derecognised when it is disposed of and when permanently withdrawn. Any gain or loss is recognised in the profit and loss.
This includes; a) Whether it has applied a fair value or cost model.
b) When classification is difficult, the criteria used to distinguish investment property from owner occupied property and property held for sale in the ordinary course of business.
c) An entity shall disclose the amounts recognised in profit or loss.
For investment property held at FV, show reconciliation of carrying amount at beginning and end of period.
d) For investment property under the cost model, depreciation methods used, useful lives or depreciation rates used, the gross carrying amount and accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of each period, a reconciliation of carrying amount at the beginning and end of each period, under the cost model, entity must still disclose the fair value of the investment property.