Document
Index

ICDS V - Tangible fixed assets

Updated on: Jun 15th, 2024

|

2 min read

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

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.BasisICDS VAS 10
1.ExclusionsIt does not specify the asset which it does not deal withAS 10 does not deal with biological assets related to agricultural activity, wasting assets like, mineral rights, oil, natural gas and similar assets
2.IdentificationIt prescribes capitalization of machinery spares when they are used only in connection of tangible fixed asset and its use is irregularSpares are recognized as asset if their usage is irregular and the cost should be allocated over a period
3.RevaluationIt does not recognize re-evaluation of assetAS 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.RetirementICDS does not provide for retirement of assetsAssets retired from active use and held for disposal should be stated at the lower of their carrying amount and net realizable value
5.Depreciation methodIt does not provide for the methods of depreciationAS 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

 
Can't get yourself started on taxes?
Get a Cleartax expert to handle all your tax filing start-to-finish
summary-logo

Quick Summary

ICDS V explains treatment of tangible fixed assets like land, machinery, and furniture. It details identification, components of actual cost, and disclosure requirements. It also compares ICDS V with AS 10, highlighting differences in exclusions, identification, revaluation, retirement, and depreciation methods.

Was this summary helpful?
liked-feedbackliked-feedback

Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

Cleartax is a product by Defmacro Software Pvt. Ltd.

Company PolicyTerms of use

ISO

ISO 27001

Data Center

SSL

SSL Certified Site

128-bit encryption