One of my client's core business is to purchase computers and laptops and then rent them. I want to know wether the movable property purchased should be recorded as inventory or it should be capitalised?
Please help...!!!
3 Replies
Sangram Kumar
(student)
(344 Points)
Replied 18 July 2016
in my view it shoud not be recorded as inventory as per AS-2 AND AS-19
Jishnu Surendran
(Finance Manager)
(312 Points)
Replied 19 July 2016
I shall disagree as the client's business is to rent laptops, not to sell them. The purpose of holding an asset is too important in classification. Here, the party is holding the asset for deriving future benefits and also have control of the asset. Sufficient to classify it as 'fixed assets'.
Please note that the reply is based on prima facie inference on your question.
Praveen Tawania
(Owner)
(369 Points)
Replied 20 July 2016
Dear Member,
AS 19 Conditions should be mate.
Recent Topics
- Urgent doubt on GST
- Profit or Loss on Sale of Assets Accounting treatm
- Clarification on RCM on Rent Payment for QRMP Deal
- Reclaimed itc in gstr9
- Gamification in Accounting Software: Boosting Enga
- I want to knw Hsn code and gst rate of resin produ
- Schedule FA clarification
- Income tax on freelance income from crypto
- ITC temporary reversal and reclaim
- Query on Transactions
Related Threads
CAclubindia
