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accounting treatment of GIFT

amit (Student) (30 Points)

01 June 2009

sir please send me the accounting entry for gift received and how the gift a/c will be closed in case of an indivisual

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Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8539 Points)
Replied 01 June 2009

The accounting treatment for the gift received shall be in the following manner.

Cash / Asset / Bank A/c Dr. xxxx

To Capital A/c xxxx

The gift shall always be credited to the Capital Account.

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CA P KARTHIKA (Chartered Accountant) (715 Points)
Replied 02 June 2009

Ya Mr. Amal is right. gift should be accounted in capital a/c!

arumugam (accountant) (22 Points)
Replied 10 June 2009

Originally posted by :amit
"	sir please send me the accounting entry for gift received and how the gift a/c will be closed in case of an indivisual	"

Sir i want latest depreciation rate

Guhanadh (Inter 1st Year) (62 Points)
Replied 12 June 2009

Hi Gopal

How can we find value for a Gift

Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8539 Points)
Replied 13 June 2009

Originally posted by :Amol Gopal Kabra
"	The accounting treatment for the gift received shall be in the following manner. Cash / Asset / Bank A/c Dr. xxxx To Capital A/c xxxx The gift shall always be credited to the Capital Account.	"

I have already mentioned the Accounting Entry of Gift. So please have it againh for your reference.

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Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8539 Points)
Replied 13 June 2009

Originally posted by :Guhanadh
"	Hi Gopal How can we find value for a Gift	"

First of all, for your correction please, my name is Amol and Gopal is my father's name.

Towards your query,

The Gift will be valued at its fair price.

1. If you know the purchase price of gift, it will be the cost of purchase.

2. If the gift was purchased long before gifting, the market value may be considered (for example, land, building, gold, etc.

3. In case the both are not available, Net Realisable Amount can be conseidred as the value of the gift.

However, these are the options available. There is no specific convention for valuation of gifts. It actually depends upon case to case and situation to situation.

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Vinay Ramachandran (Chartered Accountant) (168 Points)
Replied 15 June 2009

hi i hv no problem with the entry.....

basis for valuation is also fine.....

but i feel if u hv recived gift in kind ....i.e. FA like Plant/machinery, car,furniture etc......

you shld first pass the entry at a nominal value.....so tht it gets recorded in FA register and then.....

YOU can revalue the asset on some fair basis......

Example gift recived....Machinery.....

Record at Re 1/Rs2/Rs 10...and update FA register...

and then revalue using help of expert valuer.......so as bring the PM to a realsitic val in BS.........

pulkit gupta (CA final student) (160 Points)
Replied 16 June 2009

The accounting for gift will be done only if individual is using it in his b/s or profession. There is no need for Self employed person to maintain books.

The asset is recorded at its purchase price and since it is a gift it wil be recorded at nominal value.