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fixed assets accounting

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Querist : Anonymous

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Querist : Anonymous (Querist)
09 July 2011 Sir

Please let me know what is capitalisation of Fixed assets?How it is capitalised?why it is not recorded as expense when we purchase an asset?

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sanjeev sharma
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C A S.S.Agarwal, M.Com.,LL.B,

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C A S.S.Agarwal, M.Com.,LL.B, (Expert)
11 July 2011 Fixed is mean the assets purchases of which the firm or the company gets the enduring benefits and is written off by way of depreciation in number of years. Since the benefit of assets purchased is taken for number of years that is why it is not allowed as expenses. Say you have purchased a chair if you charge the cost to the expenses next year you will ask yourself that this chair is an asset but it is not appearing as an assets as because this chair can be used for number of years. Hence, it is to be shown in the Balance sheet as Fixed assets.
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