Fixed asset purchsed form italy

This query is : Resolved

GAURAV GOPAL BADWE (Querist)
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01 October 2012 DEAR ALL,
WE HAD PURCHASED ONE MACHINE FROM ITALY IN OCTOBER 2011. SUPPLIER FROM ITALY HAD SUPPLIED MACHINE 3 MONTH LATE THAN HIS COMMITED DATE. THERE WAS A LATE DELIVERY CLAUSE IN OUR PURCHASE ORDER. WE HAD INVOKED THAT OPTION OF LATE DELIVERY CLAUSE AND AGAINST WHICH SUPPLIER HAD GIVEN US CREDIT NOTE OF 2.5% OF TOTAL AMOUNT. HE HAS GIVEN THAT CREDIT NOTE IN JULY 2012.

WE HAD CAPITALISED MACHINE IN FINANCIAL YEAR 2011-12 AT FULL COST. NOW OUR QUESTION IS THAT WHETHER THIS CREDIT NOTE RECEIVED FROM SUPPLIER SHOULD BE CONSIDERED IN CAPITALISED VALUE OF ASSET. SHOULD WE REDUCE OUR CAPITALISED VALUE OF ASSET BY THAT CREDIT NOTE VALUE,OR SOME OTHER TREATEMENT SHOULD BE GIVEN TO THIS CREDIT NOTE IN ACCOUNTS.

REGARDS,

GAURAV G BADWE.

Vineet

Vineet (Expert)
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04 October 2012 Ideally you should reduce the asset value by this credit note.

Please clarify in that case , as you said customer gives you the credit note , it means he is still showing as open creditor in your books??
now when you adjust this credit note with the open creditor , then only it settles your individual account with that party.