regarding valuation of Land

This query is : Resolved

Ganesh Shetty (Querist)
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02 November 2008 Suppose We purchased a Land on 01-01-2008 for Rs 1 lakh and at the end of the Year Market Value of the Land is Rs 80000 Then Waht Journal Entry is to be Passed Please let me know the answer

Reetika Goel

Reetika Goel (Expert)
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02 November 2008 On the date of purchase,
Land A/c....................Dr
To Cash/Bank/Vendor A.c

On the date of sale,
Cash/Bank/Purchaser A/c.....Dr
Loss on sale of Land........Dr
To Land A/c

This loss will be covered under the head "Capital Gain"

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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03 November 2008 NO journal entry need be passed for market value differences if the land is retained and not sold.

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CA Bosu babu

CA Bosu babu (Expert)
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03 November 2008 not required to pass any journal entries as 31.03.08.

cost or MV which ever lower is dealt only normally for inventories & investments.

and not for fixed assets..

you have to see for impairment....

if negative impairment then decresed value shd be charged to P&L ac....

for better understanding see AS 10 & 28