‘fixed Assets Are A Source Of Future Economic Benefits Obtained Or Controlled As A Result Of Past Transactions.’ Discuss.

FUTURE ECONOMIC BENEFITS WITH RESPECT TO THE FIXED ASSETSFixed assets ar such items comparable property , plant equipment engaged by occupation entity . These will be generated when the expansion of revenue occurred . The primed(p) assets atomic number 18 qualified single when it has anticipated useful life for much than one twelvemonth and has significant value . When the furbish up assets are in use , the original shape shall be hold . The International Accounting Standard (IAS ) 16 described that opinionated assets are whose future economic befit is probable to light into entity and whose personify can be mensurable reliably . The tell assets are tangible items and held for use in the ingatheringionWhile calculating cost of item of such property ( persistent assets ) and the asset is recognized only when the future economic public assistances expected and the cost of the item is metric reliably . Accumulation of fixed assets always advantageous so that they will deliver future economic benefits It is chain ashes of past transactions . The starting of the business with the initial investment funds make contributions towards fixed assets . The fixed assets will not fall agile benefit in the current nature . It is incessant process and flow that future benefits can be achieved from the fixed assets . From such benefits again the fixed assets can be purchased . whence it is chain system . Always the benefits or profits cannot be distributed . The so derived benefits can be used for purchase of fixed assetsThe future economic benefits also depend upon the system of depreciation also . Depreciation is an allocation of some amount on asset over its useful life . Some assets commute for 25 and some qualify 100 for one year . The amount of depreciation is cost an asset after rebate residual value . The depreciation should be allocated separately for separately asset . The methods of deprecation may be fixed and diminish methods .

The method of depreciation reflects on the asset s future economic benefits The future economic benefit also depends upon the selection of bill methods , besides depreciation methods . There are three types of bill methods like Assets without amortization , asset with systematic amortization and assets with immediate write offIn accounting terminology , asset whether it is fixed or current whatever it may be which can product future economic benefit . It can be verbalise that it is economic source controlled by the ecesis derived as a result of past transactions . The assets are controlled by the organization through asset tracking tools . The asset tracking tools manage the assets from purchasing level to disposal level , which involves different stages like purchasing , upgrading , servicing , licensing , disposal etc the assets may be animal(prenominal) assets or non physical assets like intellectual property rights etcThe fixed assets are purchased for continuous and long-term use , which contributes the earning of profit in the business . It can also be termed as PPE i .e . property , plant and Equipment . The measurement of value of economic benefit is not possible then it can be measured indirectly by reference to the cash paid by the employer to...If you want to get a full essay, order it on our website: Ordercustompaper.com

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