Fixed assets

1051 views 3 replies

Dear All:

I am working on a certain project where I have to fix entire fixed asset accounting including fixed asset register. In the process I got few interesting issues and would like to have your expert advice on these matters:-

1) My company has good number of "free of cost" assets which they have received from the group companies. So, should it form part of FA register or a detailed list can be separately. In any case we are not going to charge any depreciation on these assets.

2) During physical verification we have found approx. 50-60 items like laptops, desktop etc. about which we do not have any invoices to ascertain there cost, date of purchase etc. So, what should be the treatment of these assets in FAR.

3) What should be the treatment of extended warranty purchase along with the laptops, desktops etc. My opinion is, it should be treated as deferred expenses and charge out over the warranty period which is for 3 years.

Replies (3)

Hi,

1) My company has good number of "free of cost" assets which they have received from the group companies. So, should it form part of FA register or a detailed list can be separately.

Yes

2) During physical verification we have found approx. 50-60 items like laptops, desktop etc. about which we do not have any invoices to ascertain there cost, date of purchase etc. So, what should be the treatment of these assets in FAR.

Need to ascertain cost form the Invoices, trace back from vendoe who supplied & account for.

3) What should be the treatment of extended warranty purchase along with the laptops, desktops etc. My opinion is, it should be treated as deferred expenses and charge out over the warranty period which is for 3 years. 

You are correct.

 

Rgds//Vaibhav

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Thanks Vaibhav, but regarding point # 2, how can I ascertain there cost or vendor details, when accounting department is just unable to provide any details. Can we take some avg. cost as one time exercise, may be if we are able to atleast predict with certain accuracy about the year of purchase.

HI

I dont whether auditor will accept the method, but you can consider cost of similar asset purchased.

 

Rgds//Vaibhav
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