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
- Is Aadhar PAN linking required for opening bank account?
- Applicability
- Where to show the RCM on Rent paid to unregistered landlord
- CPC Processing IT Return for AY 2023-24 without recognizing the Taxation Option under New Regime
- Application of 115BAC
- Gst Sales of FY 2023-24
- GSTR-3B - Do I file nil when there is no sale but I've bought raw materials
- TDS NUMBER SURRENDER
- Legal heir raised refund , but refund issued to the closed account of deceased.
- RCM - commercial rent paid to URP under GST
- Whether still royalty
- 20% OF DEMAND PAYMENT IN APPEAL
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
- 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?
- Query for dubts
- Regarding Resignation by Auditor from Pvt. Ltd.
Trending Online Classes
-
Excel Mastery Program
CA Rishabh Pugalia
CAclubindia
