CA Rakesh Ishi
Quick Summary
The common non-compliances in reporting requirements of various applicable Statues as observed by the Financial Reporting Review Board (FRRB) constituted by ICAI during the review proceedings. OBSERVATIONS RELATED TO ASSETS 1. SUBSEQUENT EXPENDITURE It would be recognized in the carrying am
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FAQ :
Subsequent expenditure on PPE should be recognised in its carrying amount only if it meets the recognition criteria in paragraph 7 of Ind AS 16. There is no requirement for capitalization solely based on an increase in future benefits beyond previously assessed standards.
CWIP is part of property, plant and equipment, and the expenditures recognised in its carrying amount should be disclosed in line with the requirements of Ind AS 16.
When providing depreciation on leasehold improvements, the lease term should be considered instead of just the primary period of the lease, as per paragraph 56 of Ind AS 16.
Toll Equipment is a tangible asset. Therefore, classifying it under intangible assets is not correct according to the accounting policy on Property, Plant and Equipment.
Borrowing costs should be capitalised until the asset is ready for its intended use or sale, as per paragraph 22 of Ind AS 23. Capitalising expenses beyond the date the asset is put to use is not compliant.
Leasehold land has a limited useful life and should be amortised as required under paragraphs 43 and 50 of Ind AS 16. Non-amortisation of leasehold land is against these requirements.
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