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  Accounting for Fixed Assets Assignment Help, Homework Help

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Accounting for Fixed Assets:

A vital difference exists in accounting between "current assets" and "fixed assets".

Current assets are those assets which form part of the circulating capital in a business. They are replaced regularly or can be easily converted into cash during the course of trading. The most common current assets referred to as stocks, trade debtors, and cash.

If we compare fixed assets with current assets then a fixed asset is an asset of a business that is proposed for long-term use, rather than temporary or short-term assets such as stocks. Fixed assets must further be divided in a company's balance sheet as tangible, intangible, or investments. Various examples related with intangible assets include patents, goodwill, and trademarks. Various examples of tangible fixed assets include plant and machinery, land and buildings, fixtures and fittings, motor vehicles and IT equipment.

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How should changing value of a fixed asset reflected in company accounts?

The profits that a business achieves from a fixed asset extend over a number of years. For instance, a company can use the same production machinery for numerous years, while a company-owned motor car utilized by a salesman possibly has a shorter useful life.

The accounts of a business require identifying the benefits of the fixed asset as it is consumed over numerous years by accepting the fact that the life of a fixed asset is limited.

This consumption of a fixed asset over a period of time is referred to as depreciation.

What is the applicable cost of a fixed asset?

Cost of a fixed asset comprises of all the amounts incurred to take the asset into possession and any other amounts that can be directly attributed to bringing that asset into working or usable condition.

Various directly attributable costs include:

1. Delivery costs for the asset

2. Stamp duties or import duties that are associated with acquiring the asset

3. Costs which are required for preparation of site for installation of the asset

4. Related professional fees, such as legal fees and architects' fees

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What are some key areas covered by our Accounting for Fixed Assets Assignment Help tutors:

  • Depreciation
  • Asset
  • Acquisition
  • Intangible Assets
  • Inventory
  • Leasehold Improvements
  • Office Equipment
  • Revaluation
  • Automated Fixed Assets System
  • Double Declining Balance Depreciation
  • Salvage Value In Depreciation Calculations
  • Units Of Production Depreciation

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