ACCOUNTS #20024
This query is : Resolved
09 August 2024
Dear Sir ,
I have following query with respect of Fixed Assets. Firstly whether the following items classified as fixed assets.
if yes then what shold be the group of these items:-
Welding Machine
Welding Rod
Steam Vaccum Cleaner
Steam machine
Electric Angle Grinder
ANGLE GRINDER
Straight Grinder
Randha Machine
Randha
Randha
Electric Router
Electric Router
Electric Planner
CUTTER
Marble Cutter
Welding Cutting Machine
Marble Cutter
Heat Gun
Drill
Impact Drill
Drill
Cordless Drill
Hammer
Hammer Drill
JIGSAW
JIGSAW
Jigsaw
Carbid stone
CIRCULAR SAW
Goti Pana Tools
Carbite Bits
Finishing
Cutting Blade
Jamur
Chaursi
Stone
Blade
Board Wire
Carbite Drill Bits (Metal)
Flat Wood Bit
Hammer
Ari
Tri-square
Screw Drive
Chisel
Basuli
TCT Hole Saw
Tikora
File
Shikanja Tool
Rinch
water Level
Spanner Set
Scissor
Carving wood tools
Carving metal tools
Inch Tap
P Band
Crane
Girder
Chain Pulley
sublimation printer
Multi Angle magnets
hex professinal drive box spanner
laser measuring tape with ruler 3
Floor fans
Exhausted Fans
Air Conditioner
Bulb
System
Laptop
board wire
Extension Board
CCTV Camera
Washing Machine
Old refreigrator
One Plus 11R 5G
Wifi Extenders
wifi dongal
Led Tv
Monitor
LED21 32 Moto Tablet
multi angle magnets
ferrite magnets
thermo camera
Led Panel lights and core wire
h tex mini magnetic spirit
Drafting Table
Air Compressor
I have following query with respect of Fixed Assets. Firstly whether the following items classified as fixed assets.
if yes then what shold be the group of these items:-
Welding Machine
Welding Rod
Steam Vaccum Cleaner
Steam machine
Electric Angle Grinder
ANGLE GRINDER
Straight Grinder
Randha Machine
Randha
Randha
Electric Router
Electric Router
Electric Planner
CUTTER
Marble Cutter
Welding Cutting Machine
Marble Cutter
Heat Gun
Drill
Impact Drill
Drill
Cordless Drill
Hammer
Hammer Drill
JIGSAW
JIGSAW
Jigsaw
Carbid stone
CIRCULAR SAW
Goti Pana Tools
Carbite Bits
Finishing
Cutting Blade
Jamur
Chaursi
Stone
Blade
Board Wire
Carbite Drill Bits (Metal)
Flat Wood Bit
Hammer
Ari
Tri-square
Screw Drive
Chisel
Basuli
TCT Hole Saw
Tikora
File
Shikanja Tool
Rinch
water Level
Spanner Set
Scissor
Carving wood tools
Carving metal tools
Inch Tap
P Band
Crane
Girder
Chain Pulley
sublimation printer
Multi Angle magnets
hex professinal drive box spanner
laser measuring tape with ruler 3
Floor fans
Exhausted Fans
Air Conditioner
Bulb
System
Laptop
board wire
Extension Board
CCTV Camera
Washing Machine
Old refreigrator
One Plus 11R 5G
Wifi Extenders
wifi dongal
Led Tv
Monitor
LED21 32 Moto Tablet
multi angle magnets
ferrite magnets
thermo camera
Led Panel lights and core wire
h tex mini magnetic spirit
Drafting Table
Air Compressor
13 August 2025
1. How to Identify Fixed Assets
According to Accounting Standard AS‑10:
An item qualifies as a Fixed Asset if:
It’s held for use in business to generate future economic benefits (and not for resale), and
Its cost can be measured reliably
Income Tax India
.
Small items that are individually insignificant may instead be grouped under a category (like machines/tools) if treated as a single block asset
Income Tax India
.
2. Consumables vs. Stores & Spares (Inventory)
Consumables are items used up rapidly, without significant useful life (e.g., welding rods, drill bits). These are recorded as expense when purchased
CAclubindia
.
Stores & Spares are items that are kept in inventory and used for maintenance or repair. They’re initially recorded as inventory (asset), and expensed when consumed
CAclubindia
.
3. Common Practice in Accounting Software (like Tally)
Fixed Asset groups commonly used include:
Plant & Machinery, Machine & Tools, Computers & Peripherals, Furniture & Fixtures, Air Conditioner, etc.
itclass.in
waytosimple.com
4. Suggested Classification Table
Item(s) Included Above Likely Classification Recommended Asset Group in Accounts (Tally)
Welding Machine, Steam Vacuum Cleaner, Steam Machine, Angle Grinder, Electric Router/Planner, Marble Cutter, Air Compressor, AC, Printer, Sublimation Printer Fixed Asset (if useful life >1 year) Machine & Tools / Plant & Machinery
Laptop, Monitor, Tablet, LED TV Fixed Asset Computers & Peripherals
CCTV Camera, Washing Machine, Refrigerator Fixed Asset Electrical Equipment / Fixed Assets
Fans, Floor Fans, Exhaust Fans Fixed Asset Electrical Equipment
Minor hand tools (hammer, chisels, spanners, files, screwdrivers, Tri-square, etc.), drill bits, cutting blades, Jigsaw, consumables (welding rods, stone bits, nails) Consumables / Stores & Spares Consumables / Inventory
WiFi Extender, WiFi Dongle, Thermo Camera, Laser Tape Fixed Asset or Consumable depending on cost & useful life Electrical Equipment or Consumables
Carbid stone, Carbite Bits (small replaceable bits) Consumables / Stores Stores & Spares / Consumables
Additional Considerations
Threshold approach: You may define a monetary threshold: equipment above that gets capitalized; below that, expensed. This approach is common where large numbers of small tools are involved (see Reddit practice discussion)
Reddit
+1
.
Fixed assets must be tracked, depreciated, and reported in financial statements.
Consumables should be expensed immediately or tracked as inventory until consumed.
Summary: What to Capitalize vs. Expense
Capitalize (Fixed Assets): Major equipment & appliances with a useful life >1 year (e.g., welding machines, ACs, laptops, printers).
Expense/Inventory: Small, frequently replaced tools and supplies with shorter lives (e.g., tools, drill bits, consumables).
According to Accounting Standard AS‑10:
An item qualifies as a Fixed Asset if:
It’s held for use in business to generate future economic benefits (and not for resale), and
Its cost can be measured reliably
Income Tax India
.
Small items that are individually insignificant may instead be grouped under a category (like machines/tools) if treated as a single block asset
Income Tax India
.
2. Consumables vs. Stores & Spares (Inventory)
Consumables are items used up rapidly, without significant useful life (e.g., welding rods, drill bits). These are recorded as expense when purchased
CAclubindia
.
Stores & Spares are items that are kept in inventory and used for maintenance or repair. They’re initially recorded as inventory (asset), and expensed when consumed
CAclubindia
.
3. Common Practice in Accounting Software (like Tally)
Fixed Asset groups commonly used include:
Plant & Machinery, Machine & Tools, Computers & Peripherals, Furniture & Fixtures, Air Conditioner, etc.
itclass.in
waytosimple.com
4. Suggested Classification Table
Item(s) Included Above Likely Classification Recommended Asset Group in Accounts (Tally)
Welding Machine, Steam Vacuum Cleaner, Steam Machine, Angle Grinder, Electric Router/Planner, Marble Cutter, Air Compressor, AC, Printer, Sublimation Printer Fixed Asset (if useful life >1 year) Machine & Tools / Plant & Machinery
Laptop, Monitor, Tablet, LED TV Fixed Asset Computers & Peripherals
CCTV Camera, Washing Machine, Refrigerator Fixed Asset Electrical Equipment / Fixed Assets
Fans, Floor Fans, Exhaust Fans Fixed Asset Electrical Equipment
Minor hand tools (hammer, chisels, spanners, files, screwdrivers, Tri-square, etc.), drill bits, cutting blades, Jigsaw, consumables (welding rods, stone bits, nails) Consumables / Stores & Spares Consumables / Inventory
WiFi Extender, WiFi Dongle, Thermo Camera, Laser Tape Fixed Asset or Consumable depending on cost & useful life Electrical Equipment or Consumables
Carbid stone, Carbite Bits (small replaceable bits) Consumables / Stores Stores & Spares / Consumables
Additional Considerations
Threshold approach: You may define a monetary threshold: equipment above that gets capitalized; below that, expensed. This approach is common where large numbers of small tools are involved (see Reddit practice discussion)
+1
.
Fixed assets must be tracked, depreciated, and reported in financial statements.
Consumables should be expensed immediately or tracked as inventory until consumed.
Summary: What to Capitalize vs. Expense
Capitalize (Fixed Assets): Major equipment & appliances with a useful life >1 year (e.g., welding machines, ACs, laptops, printers).
Expense/Inventory: Small, frequently replaced tools and supplies with shorter lives (e.g., tools, drill bits, consumables).
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