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In this article, we will explain about ICDS V and its difference with respective Notified AS.

ICDS V Tangible fixed assets

ICDS V deals with the treatment of tangible fixed assets, which can be a land, a building, a machinery, a plant or a furniture, and that it is not held for sale, but is meant to be used for the purpose of producing or providing goods or services.

Identification of Tangible fixed assets

1. Machine spares are charged to revenue as and when consumed

2. If machine spares are used only in connection with the tangible fixed asset and the use is not the regular one, then machine spares will be capitalized

3. Stand-by and servicing equipments are to be capitalized

Components of Actual Cost

1. Its purchase price, duties and taxes, and any directly attributable expenditure on making the asset ready for its ultimate use will be included

2. Any after acquisition price adjustments and exchange fluctuations will form part

3.  Any expenditure incurred till the production is begun

4. Any trade discount and rebates will not be included

5. Any administration and general overhead expense which are not in direct relation to the asset will not be included

6. When tangible fixed asset is acquired in exchange for another asset or shares or securities, then the fair value of acquired fixed asset will be the actual cost

7. Expenditure that increases future benefits of asset beyond its earlier standard performance, then such expense will be form part of actual cost

8. Any capital expenditure to add on any extension to existing asset which becomes integral part of that fixed asset then that expenditure will also be included in the actual cost

9. Any extension which is capable of being used as a separate fixed asset, then the cost of such asset will not form part of actual cost of the main fixed asset


Disclosure should be made in respect of :

1. Description of asset or block of assets

2. Rate of depreciation

3. Actual cost or written down value

4. Additions or deductions during the year

5. Put to use date of asset

6. Depreciation allowable

7. Adjustments, if any, on account of CENVAT claimed or allowed

8. Changes in rate of exchange of currency

9. Subsidy or grant

Comparison of ICDS V and AS 10

Sl. No. Basis ICDS V AS 10
1. Exclusions It does not specify the asset which it does not deal with AS 10 does not deal with biological assets related to agricultural activity, wasting assets like, mineral rights, oil, natural gas and similar assets
2. Identification It prescribes capitalization of machinery spares when they are used only in connection of tangible fixed asset and its use is irregular Spares are recognized as asset if their usage is irregular and the cost should be allocated over a period
3. Revaluation It does not recognize re-evaluation of asset AS 10 provides re-evaluation of asset which should be done regularly in order to ensure that carrying amount does not differ materially from fair value at the balance sheet date
4. Retirement ICDS does not provide for retirement of assets Assets retired from active use and held for disposal should be stated at the lower of their carrying amount and net realizable value
5. Depreciation method It does not provide for the methods of depreciation AS 10 provides for different types of depreciation method that can be adopted

For further reading on these series, check out our next article on ICDS VI

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