Accounts

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Dear Members
dismantling expenses  incurred to sale a Machinery .What will be the treatment ?
Thank you

Replies (3)
Can you a/c in Repairs & Maintenance !

You can Reduce Expense amount form the Gross sale amount. 

I also think that it should be reduced from sale consideration.

In capital gains, you reduce selling costs from sale consideration along with costs, to arrive at capital gain.

The same logic applies here also.

It is not an ordiary repair in the due coure of business hence it cannot be accounted under that head.

Also while preparing cash flows, accounting such repairs in operating activities would mislead  as it is not an operating expenditure.


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