Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

Accounting

vishwam (article trainee) (82 Points)

13 March 2013

Hello all,

I have a query regarding the accounting treatement. If someone purchase a vehicle for his vehicle hire business,can he show it as an asset?or what else the accounting treatment?Please clarify me.

Reply
Follow
Share

16 Replies

Vardan Singh Sengar (Accounts Manager in Private Company) (433 Points)
Replied 13 March 2013

if the vehicle is purchased for the business purpose (income) than obviously it must be shown in the assets side of balance sheet...whether the asset derives any income or not...

Upgrade to CAclubindia Pro. Subscribe Now!

Gemina (Inter CA) (54 Points)
Replied 13 March 2013

If the person is purchasing the vehicle for Vehicle Hire business than it cannot be shown as asset, since he is using the same for regular business activity.

Vardan Singh Sengar (Accounts Manager in Private Company) (433 Points)
Replied 13 March 2013

@ gemina...which accounting rule is applicable???

vishwam (article trainee) (82 Points)
Replied 13 March 2013

Hi vardhan sir

Vehicle is deriving income,but it is used in regular business activity i.e,main business activity.So How Can i show it as an asset?

IMAM (ARTICLE ASST.) (371 Points)
Replied 13 March 2013

AS YOU SAY HE PURCHASE VEHICLE FOR BUSINESS ITS BUSINESS ASSETS.

SO CONCLUSION IS THAT YOU SHOULD SHOW THAT AS A ASSET.

Upgrade to CAclubindia Pro. Subscribe Now!

Vardan Singh Sengar (Accounts Manager in Private Company) (433 Points)
Replied 13 March 2013

i agreed with IMAM.

IMAM (ARTICLE ASST.) (371 Points)
Replied 13 March 2013

HE HAS HIRING OF VEHICLE SO ITS NOT STOCK IN TRADE ITS ACTUALLY HIS PROPERTY/ASSET SO SIR YOU HAVE TO SHOW IT AS ASSET

IMAM (ARTICLE ASST.) (371 Points)
Replied 13 March 2013

VISHWAM WHERE YOU FROM ? IF YOU NEED DIRECT GUIEDANCE THEN I CAN GIVE MY CELL NO.IF YOU WANT

Vardan Singh Sengar (Accounts Manager in Private Company) (433 Points)
Replied 13 March 2013

@ GEMINA....FOR E.G. SUPPOSE YOU STARTED YOUR OWN BUSINESS OF TOURS & TRAVELS AND IF YOU ARE PROVIDING CARS & BUSES ON RENTALS TO OTHER THAN YOU SHOULD APPLY SERICE TAX TOO ON SUCH SERVICE ON THE OTHER HAND IF YOU ARE PURCHASING SUCH ASSETS FOR BUSINESS EXPANSION OR A STARTUP AS THE CASE MAY BE...YOU SHOUL SHOW IT ON THE ASSET SIDE OF THE B/S...ON THE OTHER HAND DEPRECIATION IS ALSO APPLICABLE..