FRS 15 Tangible Fixed Assets

FRS 15 has been superseded by FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland for accounting periods beginning on or after 1 January 2015. For more information visit:

• icaew.com/newukgaap

Synopsis

The objective of FRS 15 is to ensure that tangible fixed assets are accounted for on a consistent basis and that where there is a policy of revaluation of fixed assets these revaluations are kept up to date.

Tangible fixed assets should initially be measured at cost which are the costs that are directly attributable to bringing the asset into working condition for its intended use. Subsequent expenditure should be capitalised in three circumstances:

• Where it enhances the economic benefits of the asset in excess of its previously assessed standard of performance
• Where it replaces or restores a component of the asset that has been treated separately for depreciation purposes
• Where it relates to a major inspection or overhaul that restores the economic benefits of the asset which have been consumed by the entity

Revaluation of tangible fixed assets is permitted but if this policy is adopted it must be applied to all the assets of the same class. Revaluation does not need to be every year but it does need to be kept up to date.

• Revaluation gains are taken to the statement of total recognised gains and losses
• Revaluation losses caused by a clear consumption of economic benefits are recognised in the profit and loss account
• Other losses are largely recognised in the statement of total recognised gains and losses

Tangible fixed assets should be depreciated over their useful economic lives.

• Read FRC Summary on FRS 15

Last updated 21 June 2015