Wk_c06 As6 As10 v Ind As16 v Ias16
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Accounting > India Financial Reporting Manager Practice Manual > Comparison between AS & Ind AS & IFRS > [C06] AS6 & AS10 v IND AS16 v IAS16 © Wolters Kluwer (India) Pvt. Ltd 1 [C06] AS6 & AS10 v IND AS16 v IAS16 Click to open document in a browser Last reviewed: 17 May 2013 S. No. Topic AS IND AS IFRS AS 6 - Depreciation Accounting and AS 10 - Accounting for Fixed Assets Ind-AS 16 - Property, Plant and Equipment IAS 16 - Property, Plant and Equipment 1 Scope There is no exemption from AS -10 for property under development for future use as investment property. However As - 10 specifically excludes accounting for real estate developers from its scope Property under construction or development for future use as investment property is excluded from the scope of Ind AS 16 and is within the scope of Ind AS 40 , Investment Property. However Ind AS 16 does not exclude such developers from its scope Property under construction or development for future use as investment property is excluded from the scope of IAS 16 and is within the scope of IAS 40, Investment Property. However Ind AS 16 does not exclude such developers from its scope 2 Replacement Costs Replacement cost of an item of property, plant and equipment is generally expensed when incurred Replacement cost of an item of property, plant and equipment is capitalised if replacement meets the recognition criteria. Carrying amount of items replaced is derecognised. Replacement cost of an item of property, plant and equipment is capitalised if replacement meets the recognition criteria. Carrying amount of items replaced is derecognised. 3 Cost of Major Inspections Costs of major inspection are also expensed when incurred. Cost of major inspections and overhauls are recognised in the carrying amount of property, plant and equipment as a replacement if recognition criteria are met. Any remaining carrying amount of the cost of the previous inspection is derecognised Cost of major inspections and overhauls are recognised in the carrying amount of property, plant and equipment as a replacement if recognition criteria are met. Any remaining carrying amount of the cost of the previous inspection is derecognised 4 RevaluationNo specific requirement on frequency of revaluation If an entity adopts the revaluation model, revaluations are require to be made with sufficient regularity to ensure that the carrying amount does not differ materially from the fair value at the end of reporting period. If an entity adopts the revaluation model, revaluations are require to be made with sufficient regularity to ensure that the carrying amount does not differ materially from the fair value at the end of reporting period. 5 Component Accounting Fixed assets are not required to be componentised and depreciated separately, although AS 10 states that such an approach may improve the accounting for an item of fixed asset. Schedule XIV to the Companies Act, 1956 specifies the minimum depreciation rates to be used for different categories of assets Property, Plant and Equipment are componentized and are depreciated separately. There is no concept of minimum statutory depreciation under Ind AS Property, Plant and Equipment are componentized and are depreciated separately. There is no concept of minimum statutory depreciation under IFRS 6 Compensation for Impairment No specific requirement. In practice, compensation Compensation from third parties for impairment or loss of items of property, plants & equipment are Compensation from third parties for impairment or loss of items of property, plants & equipment are
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Transcript of Wk_c06 As6 As10 v Ind As16 v Ias16
Accounting > India Financial Reporting Manager Practice Manual > Comparison between AS & Ind AS & IFRS > [C06] AS6 & AS10 v IND AS16 v IAS16
© Wolters Kluwer (India) Pvt. Ltd1
[C06] AS6 & AS10 v IND AS16 v IAS16Click to open document in a browser
Last reviewed: 17 May 2013
S. No. Topic AS IND AS IFRS
AS 6 - DepreciationAccounting and
AS 10 - Accountingfor Fixed Assets
Ind-AS 16 - Property,Plant and Equipment
IAS 16 - Property,Plant and Equipment
1 Scope There is no exemptionfrom AS -10 for propertyunder developmentfor future use asinvestment property.However As - 10specifically excludesaccounting for realestate developers fromits scope
Property under construction ordevelopment for future use asinvestment property is excludedfrom the scope of Ind AS 16 andis within the scope of Ind AS 40,Investment Property. HoweverInd AS 16 does not exclude suchdevelopers from its scope
Property under construction ordevelopment for future use asinvestment property is excludedfrom the scope of IAS 16 andis within the scope of IAS 40,Investment Property. HoweverInd AS 16 does not exclude suchdevelopers from its scope
2 ReplacementCosts
Replacement cost ofan item of property,plant and equipmentis generally expensedwhen incurred
Replacement cost of an item ofproperty, plant and equipment iscapitalised if replacement meetsthe recognition criteria. Carryingamount of items replaced isderecognised.
Replacement cost of an item ofproperty, plant and equipment iscapitalised if replacement meetsthe recognition criteria. Carryingamount of items replaced isderecognised.
3 Cost ofMajorInspections
Costs of majorinspection are alsoexpensed whenincurred.
Cost of major inspections andoverhauls are recognised in thecarrying amount of property, plantand equipment as a replacementif recognition criteria are met. Anyremaining carrying amount of thecost of the previous inspection isderecognised
Cost of major inspections andoverhauls are recognised in thecarrying amount of property, plantand equipment as a replacementif recognition criteria are met. Anyremaining carrying amount of thecost of the previous inspection isderecognised
4 RevaluationNo specific requirementon frequency ofrevaluation
If an entity adopts the revaluationmodel, revaluations are require tobe made with sufficient regularityto ensure that the carrying amountdoes not differ materially from thefair value at the end of reportingperiod.
If an entity adopts the revaluationmodel, revaluations are require tobe made with sufficient regularityto ensure that the carrying amountdoes not differ materially from thefair value at the end of reportingperiod.
5 ComponentAccounting
Fixed assets arenot required to becomponentised anddepreciated separately,although AS 10 statesthat such an approachmay improve theaccounting for an itemof fixed asset. ScheduleXIV to the CompaniesAct, 1956 specifies theminimum depreciationrates to be used fordifferent categories ofassets
Property, Plant and Equipment arecomponentized and are depreciatedseparately. There is no conceptof minimum statutory depreciationunder Ind AS
Property, Plant and Equipment arecomponentized and are depreciatedseparately. There is no conceptof minimum statutory depreciationunder IFRS
6 CompensationforImpairment
No specificrequirement. Inpractice, compensation
Compensation from third partiesfor impairment or loss of items ofproperty, plants & equipment are
Compensation from third partiesfor impairment or loss of items ofproperty, plants & equipment are
Accounting > India Financial Reporting Manager Practice Manual > Comparison between AS & Ind AS & IFRS > [C06] AS6 & AS10 v IND AS16 v IAS16
© Wolters Kluwer (India) Pvt. Ltd2
is offset againstreplaced items ofproperty, plant &equipment
included in profit & loss when thecompensation becomes receivable
included in profit & loss when thecompensation becomes receivable
7 Transferfromrevaluationreserve
Transfer fromrevaluation reserve maybe done through thestatement of profit &loss
Transfer from revaluation reserve toretained earnings are made directlyand not through profit & loss.
Transfer from revaluation reserve toretained earnings are made directlyand not through profit & loss.
8 Reassessment- Estimates of residualvalue are not requiredto be updated
- Estimates of residual value needsto be reviewed at least at the end ofeach financial year
- Estimates of residual value needsto be reviewed at least at the end ofeach financial year
- Reassessmentof useful life anddepreciation method notcurrently required
- Reassessment of useful life anddepreciation method requiresannual reassessment
- Reassessment of useful life anddepreciation method requiresannual reassessment
9 Change inmethod ofdepreciation
Requires retrospectivere-computation ofdepreciation and anyexcess or deficit onsuch re-computationis required to beadjusted in the periodin which such changeis effected. Such achange is treated as achange in accountingpolicy and its effectis quantified anddisclosed. There is norequirement to reviewthe depreciation methodon an annual basis.
If there has been a significantchange in the expected pattern ofconsumption of the future economicbenefits associated with the asset,the method should be changed toreflect the changed pattern. Such achange should be accounted for asa change in an accounting estimateand applied prospectively. Thedepreciation method applied to anasset should be reviewed at least ateach financial year-end.
If there has been a significantchange in the expected pattern ofconsumption of the future economicbenefits associated with the asset,the method should be changed toreflect the changed pattern. Such achange should be accounted for asa change in an accounting estimateand applied prospectively. Thedepreciation method applied to anasset should be reviewed at least ateach financial year-end.
10 Presentationof capitalAdvances
Schedule VI requirescapital advancesto be presentedseparately under thehead “Long Term loans& advances” as part ofnon current assets.
No specific guidance though usuallyincluded in capital work in progress
No specific guidance though usuallyincluded in capital work in progress
11 Routinesale ofsomeproperties
No specific guidance Entities might routinely sell itemsof property, plant & equipment thatthey have previously held for rentalto others. The proceeds from sale ofsuch assets should be recognisedas revenue in accordance with IndAS 18
Entities might routinely sell itemsof property, plant & equipment thatthey have previously held for rentalto others. The proceeds from sale ofsuch assets should be recognisedas revenue in accordance with IAS18
12 Decommissioning,Restorationand SimilarLiabilities
No specific guidance Provision for decommissioning,Restoration and Similar Liabilitiesthat have been previouslyrecognised as part of the cost of anitem of property, plant & equipmentare adjusted for changes in amountor timing of future costs and forchanges in market based discountrates.
Provision for decommissioning,Restoration and Similar Liabilitiesthat have been previouslyrecognised as part of the cost of anitem of property, plant & equipmentare adjusted for changes in amountor timing of future costs and forchanges in market based discountrates.
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