Agreement to sale land

This query is : Resolved 

13 April 2016 If only agreement to purchase land at fixed amount on fixed date in future made then whether there is any entry to be made in books of accounts of purchaser and seller?

13 April 2016 No entry to be made in books of account until any transaction takes place like payment of advance etc.

14 April 2016 Yes Sir,but in case of big Company if this Company make agreement to purchase land from any person(seller) at fixed price in fixed future date though there in no outflow of money in form of advance or otherwise,How this company disclose this information to its stakeholders?


14 April 2016 It may be disclosed as capital commitment...but legal agreement should be there

14 April 2016 Yes Sir...it will be disclosed in capital commitment in notes to accounts in balance sheet in auditor's report..right?and no accounting entry made

14 April 2016 Yes only in notes to accounts...no accounting entry required as no inflow / outflow of funds is there and no ownership transferred.

14 April 2016 Ok Sir,Thank you very much.



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