Cost of Fixed Asset

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CA Jigar Parikh (Querist)
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01 January 2010 Hi
This question is with respect the cost with which the Fixed Asset should be recorded in the books of accounts. The transaction goes like this...

Mr.X sales few high value assets on behalf a company which in turn gives asset to Mr X. The assets so received can be termed as Fixed Asset for Mr. X. (May be one can take a view that this is Gift or can also say that its consideration in lieu of commission!!)

What should be the cost of asset that should be accounted / recorded in the books of accounts?? (pls give reference of ASI / AS / IFRS / guidance note paragraph in the context of answer)

Regards
Jigar

shakuntala chhangani

shakuntala chhangani (Expert)
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04 January 2010 Hi Jigar, from ur question, it is clear that Mr. X is working as a selling agent for the company. He sold the assets for the co. and received commission in the form of fixed assets. Here the entry will be :
Fixed Assets A/c Dr.
To Commission A/c
your question is - at what amount?
for this will need to look into the agreement between the co. and Mr. X. In case it is silent (which is a rare case), u need to record the asset at fair value. AS 10 deals with fixed assets accounting but this particular situation is not covered there.
Regards, CA Shakuntala Chhangani