Accounts

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mohan

mohan (Querist)
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22 August 2011 what should be the accounting treatment for capital profit on sale of an asset and why

Kumar Babu.G

Kumar Babu.G (Expert)
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22 August 2011 Bannk a/c or Party a/c Dr
To Asset a/c
To Gain on Sale of Asset a/c

And gain on sale of asset is not a capital profit we have to take it P&L a/c.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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22 August 2011 yes. it need to be shown in p&l only. not capital profit

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C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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22 August 2011 I agree with the experts

CA Ravi Sisodia

CA Ravi Sisodia (Expert)
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22 August 2011 According to AS-10 any profit/loss arises by sell or disposal of fixed assets will transfer to p&l a/c.

mohan

mohan (Querist)
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22 August 2011 dear sir,i am talking about capital profit that is profit above the orignal cost..wouldnt it be better to transfer that to capital reserve instead of passing it through the p and l

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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24 August 2011 yes. Fixed asset or capital assets sale value exceeds the value of actual value, need to be accounted in profit & loss a/c only