Abuyahya (Accountant) (33 Points)
18 December 2011Dears
An amount of Rs 1 crore was given to EPC contractor for a project of 10 crore to be completed in year 2013.The amount was shown as advance to contractors in current asset. Our Internal auditor recommends to post in Asset under construction forms part of Fixed asset.Is it correct ?????If we transfer from current asset group liquidity ratio is affected which is breach of covennant for a financial firm lend fund to us.
Please help us
CA Saiyum khan
(Practicing CA)
(690 Points)
Replied 18 December 2011
Rahul Gupta
(Chartered Accountant)
(644 Points)
Replied 18 December 2011
| Originally posted by : CA Saiyum khan | ||
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As per sch 6 adv for capex wud be grouped under fixed assets as wip. Advance given for capital assers can not ideally be shown as current assets. |
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CA Kiran Sutrave
(CA)
(428 Points)
Replied 18 December 2011
Advance paid for capital expenditure is to be shown as Capital Work In Progress under Fixed Assets and not as Advance paid under Current Assets
CA Chandani
(CA)
(217 Points)
Replied 19 December 2011
Better treatment is to consider the same under WIP.
yunus ali habib
(21 Points)
Replied 16 October 2015
I want to present quarterly capex to my management. Contract is 100 million INR. Advance payment is 10 million. Ist invoice gross value is 8 million. Net payment to contractor, after setting of advance ( @ 5% from each invoice), retention money (5% of invoice) is 7.2 million.
What should I show as CAPEX. Is it 10 million advance + 8 million or ????
Regards,
Yunus
CAclubindia
