Be the reasons what they may, the management has decided to purchase an asset. It has agreed on a budget and also made certain person responsible for acquiring it. The very moment your company possesses the rights and obligations to the asset, is the moment you recognize the asset on your balance sheet.

Not taking into account any future or subsequent measurement considerations you simply recognize the asset in its cost value. Provided you have not yet paid to the supplier, the entry is as follows:

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