IND AS EYE

      Highlights of Ind AS 16 - Property, Plant & Equipment Scope: It applies to all tangible assets except for Assets held for Sale and Assets of Discontinued Operations (Ind AS 2)  Biological Assets other than bearer plant (Ind AS 41)  Assets for Exploration and Evaluation of Mineral Resources (Ind AS 106)  Mineral Right and Mineral, oil and natural gas reserves  What is Plant, Property and Equipment (PPE):   Plant, Property and Equipment (PPE) are assets which are held for use in production of goods, rendering of services, administrative use, and rental purpose and are expected to be used in more than one period It does not include assets held for sale.  Recognition Principle: Plant, Property and Equipment (PPE) shall be recognized if it is :  Probable that future economic benefita will flow to entity, and Cost can be measured reliably.  Spare parts, Stand-by equ...

                          Ind AS 40 Vs. Ind AS 16 What is the criteria for recognition of Asset ? An item is recognized as an asset either PPE/Investment property only if the following conditions are satisfied. it is probable that future economic benefits associated with the item will flow to the entity; and the cost of the item can be measured reliably. What is Investment property (Ind AS 40) ? It is a land and/or building, or part of a building, or both, held by the owner or the lessee under a finance lease to earn rentals and/or for capital appreciation, rather than for  use in production or supply of goods and services or use in administrative purposes or sale in the ordinary course of business. we have to be careful in recognition of land and/or building under Property,Plant & Equipment (Ind AS 16) or Investment Property (Ind AS 40). When can  land & building recognize...

Introduction: The objective of this standard is to ensure that lessees and lessors provide relevant information in a  manner which provides basis for users of financial statements to assess the effect that leases have on the financial position, financial performance and cash flows of the entity. Let us understand the meaning of important terms before understanding the standard Lease : A contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. Lease term : The non-cancellable period for which a lessee has the right to use an underlying asset, together with both: (a) It includes the period at which the lessee has an  option to extend such lease if it is reasonably certain; and (b) periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option (i.e not to terminate). Right-of-use asset:  An asset that represen...