Accountin for Scrape/Surplus material sale

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Kamlesh Thakwani (Querist)
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25 December 2008
should Scrap/Surplus generated during project expansion be credeited to expansion project or credited to miscellaneous income ?

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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25 December 2008 It should be credited to the Capital Cost of the Project as the net of scrap value is the cost of acquisition.

Kamlesh Thakwani

Kamlesh Thakwani (Querist)
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25 December 2008 If asset is already capitalised,can we decapitalised with the same with scrape sale?

Can you give me reference book or Accounting standard or notes any thing supporting your answer,so that i cn put same before my management?

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CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
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25 December 2008 Yes you can reverse the entry with the revenue generated.
But if the revenue generated is Extra-ordinary in nature then it can not be like above, you have to disclose it separately.

Kamlesh Thakwani

Kamlesh Thakwani (Querist)
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25 December 2008 Can you give me reference book or Accounting standard or notes any thing supporting your answer,so that i cn put same before my management?

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
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26 December 2008 AS-4 and AS-9 will be sufficient