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What is qualifying asset? Are assets available for their intended use or sale when acquired, called qualifying assets?

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Question added by Muhammad Faheem , Consultant- Accounts, Audit & Taxation , Basim Associates
Date Posted: 2013/11/26
Shubham Jain
by Shubham Jain , CA , Gangwal khatwani and associates

A qualifying asset is a asset that necessarily takes substantial period of time to get ready for its  intended use or sale.

 

Substantial period of time, ordinarily a period of twelve months however a shorter or longer period  can also be justified as per the circumstances.

No, an asset that is ready  for its intended use or sale when acquired is not a qualifying asset.

A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale, As per IAS23

Examples include:

- Inventories (that are not produced over a short period of time)

- Manufacturing plants

- Power generation facilities

- Intangible assets

- Investment properties.

* Yes any assets available for their intended use or sale when acquired, called qualifying assets

Muhammad Zaid Shams
by Muhammad Zaid Shams , MANAGEMENT ACCOUNTANT

qualifying asset is an asset that takes a substantial period of time to get ready for its intended use or sale. [IAS23.5] That could be property, plant, and equipment and investment property during the construction period, intangible assets during the development period, or "made-to-order" inventories. [IAS23.6]

http://www.iasplus.com/en/standards/ias/ias23

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