Notes to accounts
This query is : Resolved
16 June 2013
Dear Fellow Members,
Please advise me in following scenario- XYZ is a public listed company. Local government has taken 10% of its land due to the local government's road extension project without giving any compensation.
The company follows cost model for its fixed assets. And now the question is simply passing an entry of derecognising the proportionate amount of land assuming a disposal of assets while charging profit is must or there are any other way out is here?
Please note standards for impairment is not applicable here due to carrying amount is much lower than the fair market value.
Laba Khatri
Member
Please advise me in following scenario- XYZ is a public listed company. Local government has taken 10% of its land due to the local government's road extension project without giving any compensation.
The company follows cost model for its fixed assets. And now the question is simply passing an entry of derecognising the proportionate amount of land assuming a disposal of assets while charging profit is must or there are any other way out is here?
Please note standards for impairment is not applicable here due to carrying amount is much lower than the fair market value.
Laba Khatri
Member
17 June 2013
Dear Laba,
As per AS 10 Accounting for Fixed Assets, Fixed assets means an an asset held with the intention of being used for the purpose of
producing or providing goods or services and is not held for sale in the normal course of
business.
Here in your case that 10% portion is not satisfying the basic thing Asset definition hence the same should de-recognized in books of accounts and transfer to Profit & loss account
As per AS 10 Accounting for Fixed Assets, Fixed assets means an an asset held with the intention of being used for the purpose of
producing or providing goods or services and is not held for sale in the normal course of
business.
Here in your case that 10% portion is not satisfying the basic thing Asset definition hence the same should de-recognized in books of accounts and transfer to Profit & loss account
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GST Regis.
- Inventory of finished goods
- Disallowance of Section 43B(h) to sez units
- Sale of property furniture sale
- Applicability of Ind As to associate of associate
- Confusion around Form 26QB fields
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- Clarification on Documentation of Paid-Up Capital Contribution by Directors
- Gst input for FY 23-24
- Tax on capital gains revoked us 54f
- Company Incorporation - CA and directors signing from different states
- Filing of Form 10BB instead of Filing Form 10B
- HSN Details in IFF/GSTR-1 & in GSTR 9
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
Trending Online Classes
CAclubindia
