Verification of Assets

Topic: Verification of assets 1.fixed assets.

2.intengible assets.

ACCOUNTING FOR FIXED ASSETS (AS-10)

• Fixed Assets: Fixed asset is an asset held with the intention

of being used for the purpose of producing or providing goods or services and is not held for sale in the normal course of business.

• Examples:-• Land• Building • Plant and Machinery• Furniture etc.

ACCOUNTING FOR FIXED ASSETS (AS-10)

• Applicability:-• This accounting standard is not applicable for

the following items:-• Forests, Plantations, and similar regenerative

resources.• Wasting assets like minerals , oil, and natural

gas.• Expenditure on real estate development.• Live stock.

ACCOUNTING FOR FIXED ASSETS (AS-10)

Fixed assets in financial statement:-

Fixed assets shall be shown in financial statement by two ways:-

1.- Historical Cost 2.- Revalued Price

The historical cost of acquired fixed assets consists of the following

Purchase price Import duties and other non-refundable taxes

Any directly attributable cost of bringing the asset to the working condition for its intended use like.

Historical Cost:

Revalued Price: When a fixed asset is revalued, an entire class of assets

should be revalued or the selection of assets for revaluation should be made on a systematic basis.

There are two methods of showing the revalued amount in the financial statement.

By re-stating the gross book value and accumulated depreciation.

By re-stating net book value adding there in the net increase on account of revaluation.

Intangible assets

Are rights, privileges, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance. Evidence of intangibles may exist in the form of contracts or licenses.

1. Patents, copyrights, and trademarks. 2. Acquisition of another business, in which the

purchase price includes a payment for the company's favorable attributes (called goodwill).

Patent

A patent is an exclusive right issued by the U.S. Patent Office that enables the recipient to manufacture, sell, or otherwise control an invention for a period of

20 years from the date of the grant. A patent is nonrenewable.

Trademark

They also generally enhance the sale of the product. The creator or original user may obtain exclusive legal right to the trademark or trade name by registering it with the U.S. Patent Office.

Goodwill

• . Goodwill represents the value of all favorable attributes that relate to a company. These include exceptional management, desirable location, good customer relations, skilled employees, high-quality products