Asset (f3 And F7)

Assets are used by entities predominantly to produce goods and services in order to generate cash and make profit, without any form of asset, company's operations will be impossible and in most cases, assets are major item in the financial statements of an entity. Companies can also use assets as security to secure loans. Hence assets are important and valuable in many ways, and the correct treatment of assets in the financial statements can never be over-emphasised. Any material mistakes or incorrect recognition or miss-representation of the entity's assets in the financial statements will affect the following financial statements: . Statement of profit or loss and other comprehensive income, . Statement of financial position . Statement of cash flow In fact, any material incorrect treatment of entity's assets may render the entire financial statements useless. Therefore, there is always a need for a comprehensive guide to the correct treatment and recognition of assets especially in our ever changing and continuous developmental era with sporadic changes in technology that affect business assets. It is the aim of this article to highlight the areas of tangible non-current assets, student need to be aware. Note that the tangible non-current asset was previously known as fixed asset

. Definition and types of assets, . Methods of calculating depreciation and recognition of depreciation, . Revaluation and subsequent revaluations of assets . Treatment of subsequent expenditure on assets, . Accounting for derecognition i.e. disposal of an asset . Treatment of assets with different components often referred to as complex assets . Treatment of non-current assets held for sale in accordance with International Financial Reporting Standard 5 (IFRS 5).

The tangible asset is guided by the International Accounting Standard 16.