Is there any possibilty for creating provision for fixed asset which is yet to be purchased during next finacial year although the break up is available based on agreements...amount is not yet paid
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Accounting for fixed assets
Replies (5)
Hello,
Nothing like such provision to be made,however in Notes To Accounts you can mention them the same thing under capital committments.
No need to provide for purchase as the Machinery is to be purchased in future. Entry can be made only when the Mahinery is purchased / brought in to the Premises. If you purchase the Machinery on credit, then credit the supplier's account with the purchase price of the machinery. Further the machinery should be capitalised and depreciation should be claimed as per the prescribed rate.
Regards,
Devendra Kulkarni
Yes you can use sinking fund method to arrange funds for future but there is no compulsion on that
no, there is no such provision to be made
no need to made provision for purchase of fixed assets
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