GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

Depreciation and amortization

CAS - 16 - Rule - Companies Law - CAS - 16 - CAS - 16 The following is the COST ACCOUNTING STANDARD - 16 (CAS - 16) issued by the Council of The Institute of Cost Accountants of India on "DEPRECIATION AND AMORTISATION". In this Standard, the standard portions have been set in bold italic type. This standard should be read in the context of the background material which has been set in normal type. 1. Introduction This standard deals with the principles and methods of measurement and as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ncluding those requiring attestation. 4. Definitions The following terms are being used in this standard with the meaning specified:- 4.1 Amortisation: Amortisation is the systematic allocation of the depreciable amount of an intangible asset over its useful life. It refers to expensing the acquisition cost minus the residual value of intangible assets such as Franchise, Patents and Trademarks or Copyrights in a systematic manner over their estimated useful economic life so as to reflect their c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

acquisition of such assets may not provide future economic benefits directly but may be necessary for an entity to obtain the future economic benefits from other assets. Such items also qualify for recognition as assets. 4.3 Cost Object: This includes a product, service, cost centre, activity, sub-activity, project, contract, customer or distribution channel or any other unit in relation to which costs are ascertained. 4.4 Depreciation: Depreciation is a measure of the wearing out, consumption o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Intangible assets are assets which: (i) are expected to be used during more than one accounting period; (ii) have a limited useful life; and (iii) are held by an enterprise for use in the production or supply of goods and services, for rental to others, or for administrative purposes and not for the purpose of sale in the ordinary course of business. Land is not a depreciable asset as it does not have a defined useful life. 4.7 Residual (salvage) value: Residual value is the amount which an ente .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

value of an intangible asset shall be assumed to be zero unless: (a) there is a commitment by a third party to purchase the asset at the end of its useful life; or (b) there is an active market for the asset and: I. residual value can be determined by reference to that market; and II. it is probable that such a market will exist at the end of the asset's useful life. III. The residual value of a fixed asset shall be considered as zero if the entity is unable to estimate the same with reasona .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

) Obsolescence; and (c) Legal or other limits on the use of the asset. 5.4 The useful life of an intangible asset that arises from contractual or other legal rights shall not exceed the period of the contractual or other legal rights, but may be shorter depending on the period over which the entity expects to use the asset. If the contractual or other legal rights are conveyed for a limited term that can be renewed, the useful life of the intangible asset shall include the renewal period(s) only .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is first put into use. An asset which is used only when the need arises but is always held ready for use. Example: fire extinguisher, stand by generator, safety equipment shall be considered to be an asset in use. Depreciable assets will be considered to be put into use when commercial production of goods and services commences. Depreciation on an asset which is temporarily retired from production of goods and services shall be considered as abnormal cost for the period when the asset is not in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

revaluation of assets shall not be assigned to cost object. 5.9 Impairment loss on assets shall be excluded from cost of production. 5.10 The method of depreciation used shall reflect the pattern in which the asset's future economic benefits are expected to be consumed by the entity. 5.11 An entity can use any of the methods of depreciation to assign depreciable amount of an asset on a systematic basis over its useful life. For example: (a) Straight-line method; (b) Diminishing balance meth .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assets, and which would become redundant if that asset or class of asset was retired or use of that asset was discontinued, shall form part of that asset. The depreciable amount of such spares shall be allocated over the useful life of the asset. 5.15 Cost of small assets shall be written off in the period in which they were purchased as per the accounting policy of the entity. 5.16 Depreciation of an asset shall not be considered in case cumulative depreciation exceeds the original cost of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version