accounting for replacement of assets

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Ravi Kumar Rajgaria (Querist)
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25 June 2010 One of the computer purchased in 2008 became useless and compnay replaced it in 2010 with brand new one without charging any rupee.

What will be the accounting entry and income tax treatment?

deepak K Gujrati

deepak K Gujrati (Expert)
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25 June 2010 Please see the original agreement of purchase. At the time of purchase the cost of replacement might have been defined.

If there is no cost, earlier and now also, the company may necessary entries in asset register only. There will not be any financial entry.