Valuation of closing stock
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
31 October 2010
If a company is pure trading company , registered under central excise act & just passing on excise duty according to QTY. should we include excise duty in valuation of closing stock ?
01 November 2010
Yes , stock valuation should be inclusive of excise duty.
01 November 2010
Agree,As per AS-2, Excise Duty is included in closing stock
Querist : Anonymous
Querist :
Anonymous
(Querist)
01 November 2010
But, purchases and sales both are exclusive of excise duty. They are just pass on the duty which is paid on purchases and if balance then shown under assets side. so how it can be included in closing stock?
01 November 2010
One is required to provide for the liability of duties at the time of valuation since the duties & taxes payable on the stock in hand is the charge on stock.
The duty liability so provided on closing stock is knocked off against duty liability on opening stock and indirectly nullifies the difference in the rate of charging the duty at two different point of time.
Regards
K.L.Paliwal
The duty liability so provided on closing stock is knocked off against duty liability on opening stock and indirectly nullifies the difference in the rate of charging the duty at two different point of time.
Regards
K.L.Paliwal
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