As 10 PROPERTY,PLANT AND EQUIPMENT

• Accounting Standard 10 deals with Property, Plant and Equipment (PPE). The underlying
purpose of this standard is to lay down or specify accounting treatment for Property,
Plant and Equipment. This is to enable the users of the financial statements to
understand the investment made by the business entity in property, plant and equipment
and the changes made therein.
• AS 10 do not apply in the following cases

• Biological assets related to agricultural activities excluding produce on bearer plants.

• Wasting assets including mineral rights, expenditure on exploration and extraction of mineral oil,
natural gas and similar non-regenerative resources.

• Agriculture produce is the harvested product of biological assets of an entity.

• Bearer plant is a plant which is used in the production and supply of agriculture produce. Following are
not bearer plants: –

• Plants cultivated to be harvested as agriculture produce.

• Annual crops like wheat, maize etc

• Biological assets are living animals or plants.

 Depreciation under AS 10 Property,
Plant and Equipment

• As per the standard, depreciation charge for every period must be recognized in the P/L
Statement unless it’s included in carrying the amount of any another asset. Depreciable
amount of any asset should be allocated on a methodical basis over the useful life of the
asset.

• Every part of property or P&E (Plant and Equipment) whose cost is substantial with respect to
the overall cost of the item must be depreciated separately.
 AS 13 ACCOUNTING FOR INVESTMENTS

• AS13 refers to Accounting for Investments, which is a standard set by the Institute of
Chartered Accountants of India (ICAI). The standard provides guidance on the accounting
treatment for various types of investments, including shares, debentures, bonds, and
mutual funds, among others.

• AS13 applies to all enterprises that have investments in securities, including equity
shares, preference shares, debentures, bonds, and mutual funds. It also applies to
enterprises that hold investments for trading purposes, as well as those that hold
investments with the intention of holding them for the long terms
 Key Definitions

• Before delving into the accounting treatment, it is essential to understand some of the
key definitions used in AS13:

• Held for Trading (HFT) Investments: These are investments that are bought with the
intention of selling them in the short term to make a profit.

• Available for Sale (AFS) Investments: These are investments that are not held for
trading or long-term purposes. They are held with the intention of selling them in the
future, but not in the short term.
• Held to Maturity (HTM) Investments: These are investments that are held with the
intention of holding them until maturity. They are not held for trading or short-term
purposes.
 Accounting Treatment

• The accounting treatment for investments under AS13 depends on the nature of the
investment, as follows:

• Held for Trading (HFT) Investments: HFT investments are recorded at fair value, and
any changes in fair value are recognized in the profit and loss account.

• Available for Sale (AFS) Investments: AFS investments are also recorded at fair value,
but any changes in fair value are recognized in the statement of profit and loss, except
for certain types of investments.

• Held to Maturity (HTM) Investments: HTM investments are recorded at cost, and any
interest income is recognized in the profit and loss account.
 Disclosure Requirements

• AS13 requires enterprises to provide detailed disclosures in their financial statements

related to investments, including:

• The nature of investments

• The accounting policies for investments

• The fair value of investments

• The gains or losses on investments

• The maturity profile of investments

• The restrictions, if any, on the ability to sell or redeem investments

 AS 14 ACCOUNTING FOR AMALGATIONS

• An amalgamation happens when two or more companies combine to form a

completely new entity
• Eg) When India's Maruti Motors joined forces with Japan's Suzuki, they
formed a new, amalgamated company called Maruti Suzuki Limited.
• A second example would be when Tata Sons amalgamated with Hong Kong's
AIA group to form a new, separate company called Tata AIG Life Insurance.
 ALALGAMATION IN THE NATURE
OF A MERGER

• Amalgamation in the nature of a merger As the name suggests, this is the type
of amalgamation which works as a merger. In this, the transferee or the
stronger company absorbs the transferor or the weaker company and the two
entities pool their shareholders' interest, as well as the assets and liabilities.
• After amalgamation, all the assets and liabilities of the transferor company
becomes the assets and liabilities of the transferee company.
• Shareholders holding not less than 90% of the face value of the equity
shares of the transferor company become the equity shareholders of the
transferee company by virtue of amalgamation.
• The business of the transferor company is intended to be carried on after
the amalgamation by the transferee company.
• Purchase consideration should be discharged only by issue of equity shares
in the transferee company except that cash may be paid in respect of any
fractional shares
• No adjustments are required to be made in the book values of the assets
and liabilities of the transferor company, when they are incorporated in the
financial statements of the transferee company.
• If any one of the conditions is not satisfied in a process of amalgamation, it
will not be considered as amalgamation in the nature of merger
 AMALGAMATION IN THE NATURE OF
PURCHASE

• Amalgamation in the nature of purchase is a type of amalgamation where one

company acquires the assets and liabilities of another company for
consideration. In other words, it is a purchase of one company by another
company, where the acquiring company pays the purchase price to the
acquired company's shareholders.
 DISCLOSURE

• 1. For all amalgamations the following disclosures should be made in the

first financial statements following the amalgamation:
• (a) names and general nature of business of the amalgamating companies;
• (b) effective date of amalgamation for accounting purposes.
• (c) the method of accounting used to reflect the amalgamation; and
• (d) particulars of the scheme sanctioned under a statute.
• For amalgamations accounted… methods are pooling of interest method
and purchase method. Consideration for the amalgamation and a
description of the consideration paid or contingently payable.
 AS 20 EARNING PER SHARE

• The objective of this Standard is to prescribe principles for the determination

and presentation of earnings per share which will improve comparison of
performance among different enterprises for the same period and among
different accounting periods for the same enterprise.
 MAIN FEATURES

• 1. Basic and Diluted earnings per share should be presented as a part of the
profit and loss statement for each class of Equity shares.
• 2. The basic and diluted earnings per share should be presented even if the
amounts disclosed are negative i.e. loss per share.
• 3. Basic earnings per share should be calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
• 4. Net profit or loss attributable to Equity shareholder, is the profit or loss
for the period after deducting preference dividends and any tax on
 DISCLOSURE
• An enterprise which has calculated earnings per sharc should disclose the
following to clarify the method of calculation.
• (a) The amounts used as the numerators in calculating Basic and Diluted
earnings, per share. Reconciliation of the numerator amounts to the net profit
or loss for the period.
• (b) The weighted average number of Equity Shares used as the denominator in
calculating Basic and Diluted earnings. Reconciliation of the denominators
with each other.
• (c) The nominal value of shares along with the earnings per share figures.
Some companies may wish to disclose more information than what is required
under the standard. Such information may help the users to evaluate the
performance of the enterprise
 AS 26 INTANGIBLE ASSETS
• Intangible asset is an non-physical non-monetary asset which is held for use
the production or supply of goods and services, or for rentals to others,
etc. AS 26 should be applied by all enterprises in accounting of intangible
assets, except:
• 1. Intangible assets that are within the scope of another standard financial
assets
• 2. Rights and expenditure on the exploration for or development of minerals,
oil, natural gas and similar non-regenerative resources
• 3. Intangible assets arising in insurance enterprise from contracts with
policyholders
• 4. Expenditure in respect of termination benefits.
• Initial and subsequent expenditure
• Expenditure on an intangible item should be recognized as an expense when it
is incurred, Subsequent expenditure (after purchase or completion of assets)
should be added to the cost of the intangible asset, when there is a probability
that the expenditure will generate future economic benefits and the expenditure
can be measured reliably.
• Amortization Period
• Amortization should start when the asset is available for use. The depreciable
amount of an intangible asset should be allocated on the basis of useful life.
This AS adopts a presumption that the useful life of intangible assets does not
exceed ten years. In some cases, it would be longer than ten years.
• Retirements and Disposals
• An intangible asset should be derecognized on disposal or when no future
economic benefits are expected from its use, any gain and loss (difference
between the net disposal proceeds and the carrying amount of the asset) arising
should be recognized as income or expenses in statement of P & L.
DONE BY:
SREEJA BP
RITHIKA M