![]() Until then, the asset should not be recognized.Įxample 2: A plant and machinery is purchased for ` 20 lakhs. The entity should thus be assured that it will receive the rewards attached to the asset and it will incur the associated risks, which will only generally be the case when the rewards and risks have actually passed to the entity. ![]() This should be based on the evidence available at the date of initial recognition (usually the date of purchase). The degree of certainty attached to the flow of future economic benefits must be assessed. The cost of the item can be measured reliably.It is probable that future economic benefits associated with the asset will flow to the entity and.The cost of an item of PPE should be recognized as an asset if and only if: ![]() Recognition of assets 3.1 Criteria for Recognition Further in wheat crop the plant of the wheat is not a bearer plant because it is cut down and sold as scrap. Such incidental scrap sales would not prevent the plant from satisfying the definition of a bearer plant.Įxample 1: Mango tree is a bearer plant and it covered by AS-10 PPE, however mango grown in tree is a produce of bearer plant and is not covered by this Standard. When bearer plants are no longer used to bear produce they might be cut down and sold as scrap, for example, for use as firewood. ( iii) Annual crops (for example, maize and wheat). ( ii) plants cultivated to produce agricultural produce when there is more than a remote likelihood that the entity will also harvest and sell the plant as agricultural produce, other than as incidental scrap sales (for example, trees that are cultivated both for their fruit and their lumber) and ( i) Plants cultivated to be harvested as agricultural produce (for example, trees grown for use as lumber) ( c) has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales. ( b) is expected to bear produce for more than a period of twelve months and ( a) is used in the production or supply of agricultural produce
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