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ART WORK IN BALANCE SHEET

b.c.sanghavi (consultant) (33 Points)

11 September 2007

Value where to show purchase of paintings (ART WORK) in Balance Sheet

of painting purchased Rs.17lacs

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15 Replies

madhusudan (Professional) (267 Points)
Replied 11 September 2007

In my opinion it could be shown as an item of furniture in the Fixed asset gropu

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(Guest)

THE EXPENDITURE CAN NOT BE TREATED AS FIXED ASSETS. IT SHOULD BE TREATED AS DEFERRED EXPENDITYRE FOR THE PERIOD THREE TO FIVE YEARS. YOU CAN GET MORE CLARIFICATION BBY READING INDIAN ACCOUNTING STANDARD-10.

(Guest)

this has to be treated as Fixed Asset-it is not deferred expenditure as it may have resale value after a few years which may be much more than the acquisition cost-depreciation has to be charged and capital gains has to be reckoned if it is sold

(Guest)

Art Work ( Paintings ) should be treated as an Investment.

(Guest)

it is deffered expenditure therefore it long time use for buliding so it deffered expedture

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(Guest)

with the introduction of AS 26 the concept of deferred revenue has gone...... now, only exceptions stated in the AS itself and VRS can be deferred..... hence no quetion of deferring the exp arises. I believe it should be capitalised under the head investment

(Guest)

Classification should be either as fixed assets or investment. One should first check what is the value of art painting, if it is not significant can be taken to P&L. Definitely Art painting generally never depreciates rather it appreciate as in case of land. If it is related to my Business not as stock, eg: In entertainment business, theaters, hotels etc this should be classified as Fixed assets. Otherwise if this is just for my interest, habbit, collection etc then this should be classified as an investment.

Bhuvnesh (Chartered Accountant) (101 Points)
Replied 16 September 2007

Recently introduced amendement in Companies Act states that where any assesee has incurred any exp. which is in the nature of Art Work (Paintings) the same has to be stated in the Balance Sheet as a seperate heading. The same is neither a deferred revenue exp nor is to be written off in P&L A/c. Kindly check out the recently introduced amndements to know more about it.

(Guest)

It should be shown under the head furniture and fixture

CMA Gul S (Program Manager) (5910 Points)
Replied 28 September 2007

Art Work Painting cannot be treated as Revenue item and written off as PL ITems, This would be part of Furniture and Fixture

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(Guest)

In my view, if the art work is bought to decorate the office & to have an asthetic look , it is something like interior decoration. In such eventuality,it should be considered as furniture and fittings and not as deferred revenue expenditure. Classifying Art work cannot at any stretch of imagination could be considered as deferred revenue .

Prakash Popat (3134 Points)
Replied 01 October 2007

If party is not dealers in artworks than it should come as mr.Goverdhan suggest like Interior decorations Expenses,Sometime Unique classic old artwork fetch better value than cost,one may not depreciated the same on that ground.