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V - Tangible fixed assets (w.e.f. AY 2017-18)

ICDS - 05 - Income computation and disclosure standards - w.e.f. AY 2017-18 - Other Direct Tax Provisions - ICDS - 05 - E. Income Computation and Disclosure Standard V relating to tangible fixed assets (Vide notification no. 87/2016 dated 29-9-2016 w.e.f. Assessment Year 2017-18) Preamble This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head "Profits and gains of business or profession" or "Income from other sources" .....

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a) "Tangible fixed asset" is an asset being land, building, machinery, plant or furniture held with the intention of being used for the purpose of producing or providing goods or services and is not held for sale in the normal course of business. (b) "Fair value" of an asset is the amount for which that asset could be exchanged between knowledgeable, willing parties in an arm's length transaction. (2) Words and expressions used and not defined in this Income Computation a .....

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item of tangible fixed asset and their use is expected to be irregular, they shall be capitalised. Components of Actual Cost 5. The actual cost of an acquired tangible fixed asset shall comprise its purchase price, import duties and other taxes, excluding those subsequently recoverable, and any directly attributable expenditure on making the asset ready for its intended use. Any trade discounts and rebates shall be deducted in arriving at the actual cost. 6. The cost of a tangible fixed asset m .....

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nstruction of a project or to the acquisition of a tangible fixed asset or bringing it to its working condition, shall be included as a part of the cost of the project or as a part of the cost of the tangible fixed asset. 8. The expenditure incurred on start-up and commissioning of the project, including the expenditure incurred on test runs and experimental production, shall be capitalised. The expenditure incurred after the plant has begun commercial production, that is, production intended fo .....

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ost. Any internal profits shall be eliminated in arriving at such costs. Non- monetary Consideration 10. When a tangible fixed asset is acquired in exchange for another asset, the fair value of the tangible fixed asset so acquired shall be its actual cost. 11. When a tangible fixed asset is acquired in exchange for shares or other securities, the fair value of the tangible fixed asset so acquired shall be its actual cost. Improvements and Repairs 12. An Expenditure that increases the future bene .....

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