PDF · Notes
AS 10 Property, Plant and Equipment: Notes for CA Inter Advanced Accounting
- Shared by
- Divyaaa B.
- Course
- CA Inter
- Subject
- Advanced Accounting
- Added
- 8 Nov 2026
Part of: CA InterAdv Accounting
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These notes cover AS 10 Property, Plant and Equipment, as taught in CA Inter Advanced Accounting. The first pages explain what counts as PPE, which items fall outside the standard such as biological assets and bearer plants, and when an item should be recognised in the books. They then move to measuring the cost of PPE on initial recognition, including purchase price adjustments, directly attributable costs and decommissioning provisions. The material suits students revising AS 10 for CA Inter who want a clear, example-led summary of the standard.
What the notes cover
The notes start with the definition of PPE: tangible items held for use in production, supply, rental or administration, and expected to be used for more than 12 months. They contrast PPE with inventory and show how spare parts and standby equipment are classified under AS 10 or AS 2. The pages then explain non-applicability cases, including wasting assets and intangibles under AS 26, and define bearer plants with an orange tree example. Recognition criteria are covered with a note on aggregating small items and on expensing immaterial amounts.
How to use them for revision
The cost computation layout on the fourth page works well as a revision checklist. Start from purchase price, then deduct trade discounts and rebates, add non-refundable taxes and directly attributable costs, and add the present value of decommissioning liabilities. The exclusions list, covering cash discounts, staff training, relocation and opening new facilities, is useful for quick recall in exams. Practise the journal entries for purchase and decommissioning provision alongside the explanations.
Who should read these
These notes are meant for CA Inter students preparing Advanced Accounting, particularly those working on the AS 10 chapter of the syllabus. They suit students who already have the basic idea of fixed assets and want to tighten their understanding of recognition and cost measurement before attempting questions. Students who find the standard's wording dense may find the worked-style explanations easier to follow.
Key topics in these notes
- Definition of property plant and equipment
- Non-applicability of AS 10
- Bearer plants and biological assets
- Recognition criteria for PPE
- Spare parts and standby equipment
- Cost of PPE on initial recognition
- Decommissioning and restoration liabilities
- Exclusions from cost of PPE
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Frequently asked questions
What is PPE under AS 10?
PPE is tangible property held for use in production or supply of goods or services, for rental, or for administrative purposes, and expected to be used for more than 12 months. Buildings, plant and machinery and furniture are typical examples.
When is AS 10 not applicable?
AS 10 does not apply to biological assets other than bearer plants, wasting assets, or intangible assets, which fall under AS 26. Where another accounting standard specifically covers an asset, AS 10 is not applied.
What costs are included in the cost of PPE?
Cost includes purchase price less trade discounts, non-refundable taxes, directly attributable costs to make the asset ready for use, and the present value of decommissioning liabilities. Borrowing costs under AS 16 may also be included.
Which costs are excluded from the cost of PPE?
The notes list costs of opening a new facility, introducing new products, staff training and relocation as exclusions. Cash discounts and unrelated miscellaneous income are transferred to the profit and loss account.
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