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Fixed assets are also tangible assets with the following characteristics:
(1) for the production of goods, provide services, for rental or administrative purposes;
(2) to a term of over one year;
(3) high unit price.
Classified by economic use of fixed assets, fixed assets can be divided into production and business class business class of all fixed assets of .1 non-production, production and operation class of fixed assets, is the direct service of production, business process various types of fixed assets. Such as the production and management with houses, buildings, machinery, equipment, utensils, tools. 2, non-production business with the fixed assets is not directly serving production and business processes of various fixed assets. Such as dormitories, dining hall, bathrooms, hairdressing room and so the use of housing, equipment and other fixed assets, etc..
Hug the use classification of fixed assets can be divided into fixed assets in use, no use of fixed assets and fixed assets not required.
Classification of the ownership of fixed assets can be divided into fixed assets owned fixed assets and rental income. Leased fixed assets are divided into operating lease of fixed assets and fixed assets financed by leasing.
The economic use of fixed assets and use of comprehensive classification: 1, production and operation of fixed assets. 2, with fixed assets of non-production operations. 3, leased fixed assets. Means the lease under operating lease of fixed assets to other units. 4, No need for fixed assets. 5, no use of fixed assets. 6, the land. That in the past has accounted for the land alone. Paid for land acquisition compensation fee, should be included in land-related housing, the value of the building, 7, fixed assets financed by leasing.
Details of fixed assets subject to classification according to the set, also can directly write the name of the specific device. The use of accounting software have now fixed detailed title.
Subjects use a lot, as long as the related fixed assets accounting are required.
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How do you treat a purchase of a new component of a fixed asset?
As per IAS 16: If purchase of component of fixed asset is major part of original asset or purchase of component increase the effectiveness or live of asset then it is treated as a part of original price and treated as asset. If purchase of component is routine purchase for small repair etc then it is treated as revenue expense.
Are fixed costs always irrelevant?
No fixed costs are not always irrelevant. Some fixed costs may differ among the alternatives and hence will be relevant. e.g. When figuring the incremental cost of the more expensive car, the relevant costs would be the purchase price of the new car (net of the resale value of the old car) and the increases in the fixed costs of insurance and automobile tax and license.
Is it true that fix cost remains same when output increases?
The real answer is it depends, ultimately all costs are variable even those costs that would initially appear fixed. Take for example business rates, these are set for the year and will remain the same regardless of the change in volume of the output, however should the output need to rise above the capacity of the existing business premises additional premises or even new premises would need to be acquired and with it a new level of fixed cost. This is sometimes described as step fixed cost, i.e. the cost remains at the same level until a step change is required and then the costs are again fixed at this new level until another step change is required
Why are certain costs of doing business capitalized when incurred and then amortized over subsequent accounting cycles?
The answer to this question lies in the durable life of the 'cost' you incurred. Typically, the costs which are capitalised are for items which have an expected lifetime of over 1 year. We are thinking of computer equipment (hopefully, you're not going to buy a new computer every year and throw away the old one), a building (you're not going to buy it for just one year), etc. By capitalising the cost, the item is now considered an asset, and will stay on your books for the life of the underlying item. By amortising the asset, you are in fact spreading the cost of the asset over the lifetime of the asset. Example: we buy a computer for 1000 EUR, and we intend on using it for 3 years. You will mark the computer as a fixed asset (computer equipment), and amortise it over 3 years, so you are spreading the cost equally over the lifetime of the computer itself. The first year you will amortise 334 EUR, then 333 EUR, then 333 EUR.
Can a transaction that causes an increase in an asset also cause a decrease in another asset?
Yes. If you purchase a new desk, your furniture asset account would increase, and your cash asset account would decrease.
How to record a new roof in Quickbooks?
Record the entire expenditure as a Fixed Asset. Then use the Fixed Asset Manager to amortize the expense.
Can you capitalize storage on machinery?
If you're refering to a new asset that has not yet been placed into use, all costs incurred to bring a fixed asset into a condition for use should be capitalized as part of the asset's total cost. If you're refering to idle machinery that is no longer in use, then storage expenses should be expensed.
Describe the behavior of total fixed costs as the level of activity increases?
as activity increases fixed costs per unit tend decrease, however the total fixed cost in a company behaves like a flight of stairs. it remains constant within a certain range as activity increase then jumps to a new level in a parallel line to the older one for a new range that is to be determined by the size of the fixed asset expansion as well as how much excess capacity the company wishes to keep
What is meant by the term fixed asset depreciation?
The depreciation to fixed asset ratio measures how diligently the company is replacing its old fixed assets with replacements. Companies will acquire fixed assets such as new buildings or machinery with hopes of gaining sales over the lifespan of those assets.
How do you treat a purchase of a new component of a fixed asset?
As per IAS 16: If purchase of component of fixed asset is major part of original asset or purchase of component increase the effectiveness or live of asset then it is treated as a part of original price and treated as asset. If purchase of component is routine purchase for small repair etc then it is treated as revenue expense.
How do I journalize entries for trade of fixed asset?
This is for any operational asset Debits New asset(fair value) Accumulated depreciation(account balance of old asset) Boot(cash received if any) Loss(if any) Credits Old asset (Account balance, NOT BV) Cash paid(if any) Gain(if any)
Are fixed costs always irrelevant?
No fixed costs are not always irrelevant. Some fixed costs may differ among the alternatives and hence will be relevant. e.g. When figuring the incremental cost of the more expensive car, the relevant costs would be the purchase price of the new car (net of the resale value of the old car) and the increases in the fixed costs of insurance and automobile tax and license.
What is replacement of fixed assets?
Replacement of fixed assets means to sale out the old assets and acquire a new one or replace old piece of asset with new one in exchange with same vendor.
Is it hard for a new company to get into prefect competition market?
No. Perfect competition assumes free entry and exit, which implies that fixed costs/entry costs are or are close to 0.
If equipment priced at 130000 is acquired by trading in a similar asset at 8000 What is the cost basis of the new asset?
As trade-in value of old asset is 8000 which is deducted from price of new asset and actual cash paid to acquire new asset is 122000 so the base value for new asset will be 122000.
Asset in a sentence?
My new Co worker was an asset to our company.
Is it true that fix cost remains same when output increases?
The real answer is it depends, ultimately all costs are variable even those costs that would initially appear fixed. Take for example business rates, these are set for the year and will remain the same regardless of the change in volume of the output, however should the output need to rise above the capacity of the existing business premises additional premises or even new premises would need to be acquired and with it a new level of fixed cost. This is sometimes described as step fixed cost, i.e. the cost remains at the same level until a step change is required and then the costs are again fixed at this new level until another step change is required
