Treatment for unrecorded fixed assets

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 September 2013 Shop Purchased for Rs.1484000 in 2007 against Shop Loan of Rs. 700000, by mistake Shop remain unrecorded as fixed asset but Loan recorded at liabilities side in the year 2007, now in 2013 want to rectify this mistake of unrecorded fixed asset...please reply asap

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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17 September 2013 You saying by using of Rs.700000 loan purchased fixed assets but by mistake fixed assets not recognised but loan recognised means you debit not given to fixed asset but credit given to loan account then for which account you given debit at that time.

Please specify that then can i suggest you if any chance to rectify.

OM SAI SRI SAI JAI JAI SAI

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Querist : Anonymous

Querist : Anonymous (Querist)

29 September 2013 Actually Accounts were not maintained by the client...now he wants to maintain books properly...now tell me how can we adjust/show the asset in balance sheet.

thank you.

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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29 September 2013 Then pass a journal entry as follows

Give debit to the shop account(fixed asset)
and credit to the capital account

OM SAI SRI SAI JAI JAI SAI

Querist : Anonymous

Querist : Anonymous (Querist)

29 September 2013 ok...Thanks..

But What would be the Income Tax Consequences on the above effects...?

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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29 September 2013 it will be treated as prior period transaction as also the depreciation from its date of purchase is not claimed and the profits will reduce accordingly evry year.

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Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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30 September 2013 In addition to above experts reply, you did make the mistake in Fixed assets means not the effecting of P&L account however as said by above expert we loose the benefit of claiming of depreciation thus our profit shows more means offering higher income to the IT department and we didn't make any short recognisation of income so we are in safe side and not problem will face from the department.

But there is chance to department saying not allowing of the depreciation of such attempts for further years also.

OM SAI SRI SAI JAI JAI SAI

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Querist : Anonymous

Querist : Anonymous (Querist)

07 October 2013 THANK YOU VERY MUCH...TO BOTH OF YOU

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