explain the nature and accounting treatment for fixed asset ...?

Question

it's my assignment .. couldn't found the info ... thanks for the help

Answer 1

Nature and treatment of fixed assets (now known as Property, Plant & Equipment) is governed by IAS 16.

The objective of IAS 16 is to prescribe the accounting treatment for property, plant, and equipment. The principal issues are the timing of recognition of assets, the determination of their carrying amounts, and the depreciation charges to be recognised in relation to them.

Recognition -
Items of property, plant, and equipment should be recognised as assets when it is probable that: [IAS 16.7]
* the future economic benefits associated with the asset will flow to the enterprise; and
* the cost of the asset can be measured reliably.
This recognition principle is applied to all property, plant, and equipment costs at the time they are incurred. These costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it.

For a summary of IAS 16, pls refer to the link below.

Answer 2

In accounting fixed assets are buildings, real estate properties and machineries. They are called fixed assets because they
are immovable. In a balance sheet, fixed assets are to be
found in the credit side since they are not liabilities but
properties of a company or corporation.

Answer 3

If you are referring to depreciation, then there is the straight-line method and the accelerated method. The later method more accurately reflects the useful lives of fixed assets, according to the type (i.e. cars, fixtures, buildings, etc.). There should be a schedule in your textbook that discusses "modified accelerated cost recovery system." I'm a bit rusty, but I hope that helps a bit.