Fixed assets accounting

Fixed Assets Accounting

Current assets form part of circulating capital of a business. Normally this capital is transform into cash during the course of trade. The most common current assets are stocks, trade debtors, and cash. Comparing current assets with fixed assets, a fixed asset is assets the company has with intend to use it. An example of temporary assets is stocks. Fixed assets shouldbe represented in business’s balance sheet as tangible, intangible or investments. Tangible includes: building, land, equipment, machinery and plant, fitting and fixtures, and motor vehicles. Intangible includes: patents, goodwill and trademarks. (tutor2u, parra.1-5)
The benefits of fixed assets extend through several years. An example of this benefit is depreciation if you have an equipmentin your business you can include in the balance sheet how much you equipment has depreciate for several years. The business need to recognize that benefit as it is consumed. Fixed cost incurred amounts of directly attributable costs such as: delivery costs, costs associated with acquiring the asset such as stamp duty and import duties, costs of preparing the site for installation of the asset andprofessional fees, such as legal fees and architects' fees. (tuto2u, parra.8)
3. Answer and turn in the following questions
A) Mention the sources for accounting principles development in the U.S.A.
Accounting Standard Codification
In July 1, 2009 became the single source of authoritative nongovernmental U.S. GAAP. In June 3, 2009 the FASB Accounting Standards Codification voted to approvethe codification. After September 15, 2009 the users started to use the codification and they said the existing accounting standard documents stayed superseded. The accounting literature not included in the Codification will be considered no authoritative. According to Chairman Robert Herz, he said “The FASB is confident that preparers, auditors and users of financial statements—who for years havehad to wade through hundreds of pieces of disparate GAAP literature to resolve an accounting issue—will find the Codification provides a much more efficient, user-friendly method of researching up-to-date solutions.” (Norwalk, CT, parra.2)
According to FASB Accounting Standards Codification (ASC), they are a major restructuring of accounting and reporting standards designed to simplify useraccess to all authoritative U.S. generally accepted accounting principles (GAAP) by providing the authoritative literature in a topically organized structure. FASB ASC disassembled and reassembled thousands of nongovernmental accounting pronouncements (including those of FASB, the Emerging Issues Task Force [EITF], and the AICPA) to organize them under approximately 90 topics. FASB ASC also includesrelevant portions of authoritative content issued by the Securities and Exchange Commission (SEC), as well as selected SEC staff interpretations and administrative guidance issued by the SEC; however, FASB ASC is not the official source of SEC guidance and does not contain the entire population of SEC rules, regulations, interpretive releases, and SEC staff guidance. (FASB, parra.1)
Answer andturn in the following questions
-Financial Accounting Standards Board (FASB) The designated private sector organization in the US that establishes financial accounting and reporting standards.
- American Institute of Certified Public Accountants (AICPA) is the national professional organization of Certified Public Accountants
- Securities and Exchange Commission (SEC) The mission of the U.S.Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
- Emerging Issues Task Force (EITF) An organization formed in 1984 by the Financial Accounting Standards Board (FASB) to provide assistance with timely financial reporting. The EITF holds public meetings in order to identify and resolve accounting issues...