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Send us an email and we'll get back to you, asap. Exchange of Assets Refer Ind-AS 40. If an item is revalued, the entire class of assets to which that asset belongs should be revalued. 16. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. COVID-19 cover with monthly payments, Ind AS 16 prescribes the accounting treatment for Property and P&E (Plant, and Equipment). Any gain or loss arising from such derecognition should be included in the P/L statement when such item is derecognized. Topic AS6, AS 10 Ind AS 16 Estimated costs of dismantling, removing or restoring items of PPE No specific guidance in AS 10. Understanding Ind-AS 16 is a futile exercise if we fail to read the transitional provisions in the same breath as that of reading the technicalities of the standard. On 16 February 2015, the Ministry of Corporate Affairs (MCA) notified the Companies (Indian Accounting Standards) Rules, 2015 (the ‘Rules’) (pending publication in the Gazette of India). The Institute of Chartered Accountants of India (ICAI), on 14 August 2017, issued educational material on Ind AS 16, which summarises the key requirements in Ind AS 16 and accounting issues that are expected to arise while implementing Ind AS 16 in the form of Frequently Asked Questions (FAQs). This shall be applied to the companies of financial year 2015-16 voluntarily and from 2016-17 on a mandatory basis. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Restrictions on title and items pledged as security for liabilities, Expenditures to construct PPE during the period. The principal issues are the recognition of assets, the determination of their carrying amounts, and the depreciation charges and impairment losses to be recognised in relation to them. Subsequent Recognition. (i) Residual value and the useful life of assets. Ind AS 16: Property, Plant and Equipment The objective of Ind AS 16 is to prescribe the accounting treatment for property, plant and equipment so that users of the financial statements can discern information about an entity’s investment in its property, plant and equipment and the … Repairs & Maintenance. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Biological assets can’t be covered under Q-Assets Because These assets are always carried at fair market value as per IND AS 41. Since the start of the pandemic, the state has seen 440,850 total positive cases and 6,781 total deaths. The amount of depreciation should be allocated on an orderly basis over the useful life of an asset. The term “Residual Value” is defined in AS 19. If an item is revalued, the entire class of assets to which that asset belongs should be revalued. Just upload your form 16, claim your deductions and get your acknowledgment number online. Ind AS 16 requires reviewing at the end of every financial year and applied prospectively. The course is Available on both Pendrive and Google Drive. The residual value and the useful life of an asset should be reviewed at least at each financial year-end and, any change is accounted for prospectively as a change in estimate under Ind AS 8. Revaluation model: The asset is carried at a revalued amount, being its fair value at the date of revaluation less subsequent accumulated depreciation and impairment. After recognizing an asset, PPE whose fair value could be reliably measured should be carried at the revalued amount, being the fair value at revaluation date and reduced by successively accumulated depreciation and successive accumulated impairment losses (if any). Ind AS 16 The cost of an item of PPE shall be recognised as asset, if and only if – it is probable that future economic benefits associated with the item will flow to the entity; and cost of the item can be measured reliably AS 10 Any item which falls under the definition of a fixed asset should be recognised as a Fixed Asset. Apart from AS-19 contents 16 Ind AS 2 Inventories 279 17 Ind AS 7 Statement of Cash Flows 288 18 Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors 296 19 Ind AS 10 Events after the Reporting Period 305 20 Ind AS 11 Construction Contracts 314 21 Ind AS 12 Income Taxes 330 22 Ind AS 16 … Under IND AS 19 – At the end of every quarter if the books are audited quarterly or on an annual basis Under AS 15 – On an Annual Basis. Conversion to Private Limited. Non-applicability: Ind AS 105, Ind AS 41, Ind AS 106. Efiling Income Tax Returns(ITR) is made easy with ClearTax platform. It is probable that the future economic benefits associated with the asset will flow to the entity, and. ClearTax is a product by Defmacro Software Pvt. Applicability of Ind AS As per the notification released by the Ministry of Corporate Affairs (MCA) on 16 February 2015, the roadmap for Ind AS ICAI has published fourth edition (July 2019) of the "Ind AS - An Overview" a booklet which provides an overview of the various aspects related to IFRS-converged Indian Accounting Standards (Ind AS), such as road map for the applicability of Ind AS, carve-outs from IFRS/ IAS, changes in financial reporting under Ind AS compared to financial reporting under accounting standards, … 16 years of Indian Ocean tsunami: What India has learnt The Sumatra earthquake and tsunami are considered to be an eye-opener for India as it introduced the Indian … However, such increase should be recognized in P/L statement to the extent of reversal of a revaluation decrease of similar asset recognized previously in the P/L statement, (d) In case the carrying amount of an asset is decreased due to revaluation, such decrease should be recognized in the P/L statement. AS 19: Ind AS 17: AS 19 is not applicable to lease of lands. Determining the carrying amounts of the assets, Depreciation to be recognized in the financial statements, Ind AS 16 Property Plant Equipment is applicable to all Property and P&E (Plant & Equipment) unless and until any other, The method of depreciation used should reflect an asset’s pattern of future economic benefits, At each balance sheet date, three standard requires review of. Most of the entities that performed the valuation did it on an annual basis. Ind AS 16 Property Plant Equipment is not applicable in the following cases: (i) Property and P&E (Plant & Equipment) which are classified as held for sale as per Ind AS 105 (ii) Biological assets which are related to agricultural activities except bearer plants (iii) The measurement and recognition of exploration and evaluation assets (iv) Mineral ri… Paragraphs in bold type indicate the main principles.) Ind AS 16 Property Plant Equipment is not applicable in the following cases: (i) Property and P&E (Plant & Equipment) which are classified as held for sale as per Ind AS 105, (ii) Biological assets which are related to agricultural activities except bearer plants, (iii) The measurement and recognition of exploration and evaluation assets, (iv) Mineral rights and reserves like oil, natural gas and other such non-regenerative resources. AS 10 required periodical review and prospective application. Is to prescribe the accounting treatment for PPE. As per the provision of IND AS 23. IND AS 17 vs AS – 19 Following are the GAAP differences between AS – 19 and IND AS 17. However, such decrease should be debited to other comprehensive income to the extent of credit balances available in revaluation surplus with respect to such similar asset. The Rules specify the Indian Accounting Standards (Ind AS) applicable to certain class of … Implication. Carrying amount of an item shall be derecognised on disposal or when it is withdrawn from use and no future economic benefits are expected from its use or disposal. Ind AS 17 contains specific provisions dealing with leases of land and building. Capital exp. However, major spare parts, stand-by equipment and servicing equipment qualify as property, plant and equipment when an entity expects to use them during more than one period." (a) Revaluations must be made with adequate regularity for ensuring that carrying amount doesn’t differ substantially from that which would be determined if fair value at end of the reporting period is used, (b) In case an item of PPE is revalued, whole class of such PPE to which such asset belongs should be revalued, (c) In case the carrying amount of an asset increases due to revaluation, such increase should be credited to other comprehensive income and should be accumulated in equity. IND AS 16: Property, Plant and Equipment by CA Santosh Mehra, CA Rahul Malkan, CA Jai Chawla etc.. In this video, you will see the difference between Ind AS 16 Property, Plant and Equipment and Existing AS 10 (Fixed Assets) and AS 6 (Depreciation) Gain or loss arising from the de-recognition included in profit or loss. AS 16: IND AS 23: 1: Qualifying Assets: As per the provision of AS-16, Qualifying Assets may Include Biological Assets because it does not exclude specifically out of coverage. indian accounting standards made easy (ind as) 16 property, plant and equipment by, ganapathi baliga sro0475705 manohar chowdhry & associates. As per AS 10, estimates with respect to residual value aren’t required to be updated and reviewed. has issued 39 Indian Accounting Standards (Ind AS) which have been notified under the Companies (Indian Accounting Standards) Rules, 2015 (‘Ind AS Rules’), of the Companies Act, 2013. The cost of any item of PPE must be recognized as an asset only when: (a) It is apparent that the future economic benefits related to such asset would flow to the business; and, (b) Cost of such asset could be reliably measured, (a) The purchase price, which includes the import duties and any non-refundable taxes on such purchase, after deducting rebates and trade discounts, (b) Costs which are directly attributable to bringing assets to the condition and location essential for it to operate in a manner as intended by the management, (c) Initial estimate of costs of removing and dismantling an item and restoring a site where it is located. However, increase shall be recognised in P/L to the extent that it reverses a revaluation decrease of the same asset previously recognised in P/L. A business must choose cost model or revaluation model as the accounting policy and should apply such policy to its entire class of PPE. Framework for the Preparation and Presentation of Financial Statements in accordance with Indian … The concept of ‘deemed cost’ as advocated in Ind-AS 101 (First time adoption of Ind-AS), which forms the very substratum of migrating to Ind-AS framework from the AS framework. Ind AS 16 prescribes financial statements should disclose, for every class of PPE: (i) Measurement basis for determining carrying amount, (iii) Depreciation rates/ Useful lives of the assets, (iv) Aggregate carrying amount and accrued depreciation at the start and at the end of period, (v) Existence and value of restrictions on the title and PPE pledged as collateral for liabilities, (vi) Amount of expenditure recognized in carrying amount of an item of PPE during its construction, (vii) Amount with respect to contractual commitment for acquisition of PPE. Indian Accounting Standard (Ind AS) 16 Property, Plant and Equipment (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Study Material will be provided. objectives •prescribe the accounting treatment for property, plant and equipment •recognition of the assets •determination of their carrying amounts Objective 1 The objective of this Standard is to prescribe the accounting treatment for property, plant and equipment so that users of the financial statements can … The cost of the asset can be measured reliably. Ind AS: 16 Property, plant and equipment 1. Sr. No. In accordance with IND-AS 16, the cost of an item of PPE is its cash price equivalent at the recognition date. After recognizing an asset, PPE should be carried at the cost as reduced by the accumulated depreciation and accumulated impairment losses (if any). G.S.R 111(E) dated 16 Feb 2015 : The Companies (Indian Accounting Standards) Rules, 2015. PV of MLP or Fair Value, whichever is lower. Gains arising from such derecognition shouldn’t be classified as part of revenue. Each part of PPE with a cost which is substantial with respect to the total cost of the PPE should be separately depreciated. As on date MCA has notified 41 Ind AS. Ltd. And All Theory papers across all levels of CA, CS, and CMA is available Only On Zeroinfy.in SCOPE Accounting for Property, Plant and Equipment except when another Standard requires or permits a different accounting treatment. The objective of Ind AS 16 is to prescribe the accounting treatment for property, plant and equipment so that users of the financial statements can discern information about an entity’s investment in its property, plant and equipment and the changes in such investment. Depreciation should be charged to profit or loss. However, as per AS 29, an enterprise recognizes a provision for the decommissioning cost of an oil installation to the extent that there … Ind AS 16 considers such change as changes in the accounting estimate and is applied prospectively. From third parties for impairment is included in profit or loss when the claim becomes receivable. AS 12 gives an option to reduce the grant so received from gross value of such asset, As per Ind AS 16, the cost of any major inspections must be recognized in carrying the amount of the PPE. Replacement. Gross carrying amount and accumulated depreciation and impairment losses. The Indian Accounting Standards (Ind AS), as notified under section 133 of the Companies Act 2013, have been formulated keeping the Indian economic & legal environment in view and with a view to converge with IFRS Standards, as issued by and copyright of which is held by the IFRS Foundation. 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