sale of fixed asset proft/loss treatment in books

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srinivas Ganesh Shet (Querist)
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12 August 2010 pls let me know how to treat profit/loss on sale of an asset under WDA method and how to charge depreiciation during that year

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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12 August 2010 Profit/loss on sale of asset need to charge it in p&l account to the extent of depreciation removed. depreciation need to calculate based on number of days used

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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12 August 2010 Profit/loss on sale of asset need to charge it in p&l account to the extent of depreciation removed. depreciation need to calculate based on number of days used

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CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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12 August 2010 Agreed with CMA Ramesh.

First charge the depreciation according to the applicable rate of depreciation for the

Days Used/365

in the books and then transfer it to Profit and Loss Account.

Now the Sale Value Less Book w.d.v. of Asset would be either profit or loss on Sale of Fixed Assets.

Whatever is the balance is to be transferred to Profit & Loss A/c.