Day: December 27, 2021

Several entities have large investments in such assets which have a relatively short useful life and low unit cost. Evidently, it is a difficult matter, under the circumstances, to prepare a separate account for each such assets although a careful Read More …

In the absence of a Plant Register containing detailed particulars of various articles of machinery and equipment, showing separately original cost, addition to and sales from it from time to time. It is not normally practicable for the auditor to Read More …

An Intangible Asset is an identifiable non-monetary asset, without physical substance, held for use in the production or supply of goods or services, for rental to others, or for administrative purposes. Enterprises frequently expend resources, or incur liabilities, on the Read More …

If the building has been built or is in the course of construction, under a contract the auditor should verify the debit balance of the account by reference to the architect’s certificate, as well as the contractor’s receipts for amounts Read More …

Various steps involved in the verification of leasehold rights are stated below : Inspect the lease or assignment thereof to ascertain the amount of premium, if any, for securing the lease, and its terms and conditions; and that the lease Read More …

Land and Buildings Sometimes the two assets are shown together in the Balance Sheet. Nevertheless, their ledger accounts should always be separated particularly in view of the fact that buildings are subject to depreciation while land in general is not. Read More …

1.  Clause 4(i) of CARO, 2003 requires the auditor to comment whether the company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets. What constitutes proper records is a matter of professional judgment made Read More …

The Guidance Note on Audit of Fixed Assets issued by the ICAI recommends that the verification of fixed assets consists of examination of related records and physical verification. The auditor should normally verify the records with reference to the documentary Read More …

(1) Where a company or a partnership has taken over the assets of a going concern, the agreement of sale should be inspected and that amount paid for them ascertained. It should be further verified that the allocation of the Read More …

Fixed assets are acquired for purpose of business with the object of earning revenue in the ordinary course of business ; these are intended to be used and not sold, e.g., land, building, machinery, etc. Almost all fixed assets (except Read More …