Difference in ICAI and Income Tax Standard : Tangible Fixed Assets

The CBDT has now notified the Income Disclosure and Tax Accounting Standards vide notification no. 32/2015, F. No. 134/48/2010-TPL, dated March 31, 2015. Comparative study of Accounting Standard issued by ICAI, and notified TAS has been given hereunder

Income Computation and Disclosure Standard V relating to tangible fixed assets

This Income Computation and Disclosure Standard is applicable for computation of income chargeable under the head “Profits and gains of business or profession” or “Income from other sources” and not for the purpose of maintenance of books of accounts. In the case of conflict between the provisions of the Income-tax Act, 1961 (‘the Act’) and this Income Computation and Disclosure Standard, the provisions of the Act shall prevail to that extent

Accounting Standards issued by ICAI	Income Computation and Disclosure Standards (ICDS)
TANGIBLE FIXED ASSETS
A. Acquisition of Fixed Assets in exchange for another asset or shares or securities
The fair value of the asset/securities given up or fair value of the asset acquired, whichever is more clearly evident, should be recorded as actual cost.	The fair value of the tangible fixed asset so acquired in exchange shall be its actual cost. [Para 10 and 11]
B. Capitalization of expenditure incurred on improvement and repairs
Only those expenses which increase the future benefits from the existing asset beyond its pre-assessed standards of performance should be capitalized	An expenditure that increases the future benefits from existing asset beyond its previously assessed standard of performance is added to the actual cost [Para 12]
C. Transitional Provisions
	The actual cost of tangible fixed assets, acquisition or construction of which commenced on or before 31-03-2015 but not completed by said date, shall be recognized in accordance with this standard. The amount of actual cost, if any, recognized for the said assets for any previous year commencing on or before the 01-04-2014 shall be taken into account for recognizing actual cost of the said assets for previous year commencing on 01-04-2015 and subsequent previous years.[Para 16]