replace business/profession by other

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 November 2010 I was doing bakery business for last 7 years now I have replaced it by Bike Show room.
My queries are
1, Do I will continue my balance sheet from last business. i.e capital,assets,stock etc.,
2,do I need to do any kind of changes in accounting method or not ?
3,its new business for me so what to do about last business records ?

thanks

CA. BHAVIK DILIPBHAI MEHTA

CA. BHAVIK DILIPBHAI MEHTA (Expert)
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28 November 2010 If you are a proprietor then you will have to keep the same balancesheet. Else if it was a partnership or company you can close the partnership/company & start new entity.

Regarding the accounting method, if you were following mercantile system you may continue to do so. However the stock valuation method may undergo changes since the bakery business pertained to perishable commodities. Bikes will be value at cost or N.R.V. whichever is lower.
You will have to intimate the Tax Departments regarding the change in the business in case the entity is same.

In case of any business, you will have to keep the records for a period of atleast 6 years. If you can keep the same for a longer period it is advisable.