17 June 2016
My Client has imported a machinery and held it for demonstration purpose. he is not intended to sale it in future. he is also trader of such types of Machinery. plz suggest appropriate accounting treatment.
18 June 2016
The machinery as per AS 10 has to be capitalized if it is held with the intention of being used for the purpose of producing or providing goods or services and not held for sale in the normal course. In the above case, if the demonstration is done for the purpose of providing the machinery or rendering service, it is has to be capitalized. Else considered as revenue in nature.
CAclubindia
