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Fixed assets

sunaina (Student CA IPC / IPCC) (33 Points)

25 September 2014

How can we differentiate between Furniture & Office Eqipments?

It seemed to me that geyser is a part of furniture but may be its forming part of office equipment. So,how can we differentiate between these two?

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Shivani Sharma (CA FINAL) (587 Points)
Replied 25 September 2014

Office Furniture

The term office furniture comprises furniture that is part of the office's design and includes all large furnishings, such as desks, tables, chairs and book shelves. These large items generally cost hundreds or thousands of dollars per item and last a minimum of five years. The budget for office furniture can be inconsistent, because most of an office's furniture expenses are budgeted into the company's start-up costs. Depending on the company's needs, the office furniture budget can be drastically reduced in the following year or two. Although some major office furnishings may need to be replaced every twenty years, high-quality office furniture may never need to be replaced. Well-designed and functional furniture can increase a worker's productivity and enthusiasm, meaning that an investment in office furniture is often an investment in the company's image.

Office Equipment

Office equipment is a functional or mechanical item used to facilitate production in the office, such as a fax or copier machine. Less expensive items, such as staplers, are generally classified as office supplies. The contemporary office requires an abundance of office equipment. Basic office equipment included a computer for each employee, and a printer and scanner are commonly used in each office space. More advanced office equipment might include a fingerprint or eye scanner, high-tech digital cameras or video recorders, and video conferencing equipment, including a flat screen projector. Office equipment may need to be replaced more often than office furniture, particularly as new technology is debuted and utilized. The more important the office equipment's function is to the office, the more often it will need to be replaced. Office equipment which faces more wear and tear from daily and consistent use, such as a company laptop or cell phone, will have a shorter lifespan and greater maintenance cost. Office equipment maintenance and repair costs should be a separate line item from the office equipment allocation.

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sunaina (Student CA IPC / IPCC) (33 Points)
Replied 25 September 2014

Thanx mam,i clearly understood what you posted.I had one more confusion that when we replace a fixed asset completely that doesn't form part of addition.Why so?We are replacing a fixed asset and we are purchasing a new one sideways.So why its not addition ?

(Guest)

if you are replacing a complete fixed asset.. you can make it as a new asset by discarding the old one... why u cant make a new asset...???

sunaina (Student CA IPC / IPCC) (33 Points)
Replied 25 September 2014

Sorry Sir,but i din't get your point.

(Guest)

m talking about your 2nd querry in which u said u replacing a maching and buying a new one.. then why its not being a addition..??

It wil be a new fixed assets... how it wil b a addition say that

sunaina (Student CA IPC / IPCC) (33 Points)
Replied 25 September 2014

Ohkie i got your point.You are right it will be a new fixed asset.When we just replace a part of it,that does not add up to a fixed asset.Whats the logic behind that?