V A L U A T I O N O F F I X E D A S S E T S
Introduction:
In Business and Accounting, Assets are everything of value that is owned by a person or company. It is a claim on the property your income of a borrower. The balance sheet of a firm records the monetary value of the assets owned by the firm. It is money and other valuables belonging to an individual or business. Financial statements disclose certain information relating to fixed assets. In many enterprises these assets are grouped into various categories, such as land, buildings, plant and machinery, vehicles, furniture and fittings, goodwill, patents, trade marks and designs.
Definition:
According to Accounting Standard-10 “Fixed asset is an asset held with the intention of being used for the purpose of producing or providing goods or services and is not held
for sale in the normal course of business.”
In other words Fixed assets are held by an enterprise for the purpose of producing goods or rendering services, as opposed to being held for resale in the normal course of business. For example, machines, buildings, patents or licences can be fixed assets of a business.
The two major asset classes are tangible assets and intangible assets:
Tangible assets contain various subclasses, including current assets and fixed assets. Current assets include inventory, while fixed assets include such items as buildings and equipment.
Intangible assets are nonphysical resources and rights that have a value to the firm because they give the firm some kind of advantage in the market place. Examples of intangible assets are goodwill, copyrights, trademarks, patents and computer programs, and financial asse ...