Re: [sap-acct] Problem in asset posting

Posted by swethalkumar
on Jul 4 at 4:15 PM
You are right...IAS 11 is to do with construction and IAS 16 is for asset capitalization. Asset once capitalized is carried at historical cost unless revaluation model is not adopted.

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---------------Original Message---------------
From: Roy Brookes
Sent: Monday, July 04, 2011 8:57 AM
Subject: Problem in asset posting

What do you mean by "accounting standard 11"? I just looked up IAS 11 (IFRS) and it makes no mention of fixed assets or foreign exchange fluctuations. It is to do with construction contracts in progress.

When an asset has been capitalized and brought into use, its value in company code currency is fixed. Foreign exchange no longer applies because an asset will not normally be maintained in another currency. Under US GAAP, FASB 52, assets are carried at historical exchange rates, i.e. that ruling on the date of capitalization. So how can you have an exchange rate fluctuation on an asset that is in service? It simply does not make sense. You either need to look again at your requirement or explain in more detail. Something is not right in what you have so far explained.

Rgds, Roy

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