22 October 2010
Our (A) company purchased land in 2006 from X for 50lakhs, payment has been made by Y to X on behalf A on mutual understanding of joint venture development of land, but not so good of development and A has been decided to pay the full & final settelment to Y of Rs. 75 lakhs. Actual cost of 50 lakhs alredy shown in books Debit to Land and Credit to Y 50lakhs. my quiry is how we need to treat remaining 25lakhs which not effecting with any statutory s. In agreement mentioned that 25lakhs as compensation.
plese help me to account since i have already released payment as PDC
24 November 2010
but this is not a land purchase we had paid as compensation amount for utilisation of funds for 4years how come to be added to Land, my view it should be shown as a indirect expenses, is it correct
CAclubindia
