fixed assets accounting
This query is : Resolved
Querist : Anonymous
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?
Regds
sanjeev sharma
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?
Regds
sanjeev sharma
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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