Fixed asset accounting

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 April 2016 What if fixed asset is received free of cost by say, a partnership firm and accounting standards are applicable to it. How would be this transaction accounted..?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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10 April 2016 You have to book the fixed asset market value as on the date of received, debit fixed asset and credit to reserve account under capital

Amit

Amit (Querist)
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10 April 2016 we cannot book it as nominal value say Rs.100 as debiting Asset and crediting the capital reserve as per AS 12.?

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CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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11 April 2016 No.,actually you have to book the market value, it is also required incase you claiming depreciation on that assets i, books

Amit

Amit (Querist)
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11 April 2016 OK but can we claim depreciation on market value ? As per sec 43(1) of IT act,1961

Amit

Amit (Querist)
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11 April 2016 depreciation can be claim only on actual cost of acquisition of asset..

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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11 April 2016 The asset received free of cost need to book the fair market value as on the date which received and the credit the reserve account and depreciate the same with debiting the reserve account over the useful life of the asset