Souvik Kumar Ghosh (CA Final) (1368 Points)
20 September 2013The partners of a partnership firm decided incorporated a Pvt Ltd Co, without conversion. Now after discontinuing the partnership they want to introduce the existing assets of the firm in the company without any consideration. How to incorporate the same?
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 22 September 2013
Dear Souvik,
Capitalized Fixed Asset with Fair Market Value by treating same as Loan provided to company by promoters / Shareholders.
Fixed Assets A/c Dr. xxxx
To Loan (Liability) xxxx
OR
You can enter Fixed Assets at zero value in your Fixed Assets register, if partners don't want to receive any thing as consideration for Fixed Assets in future.
Shivani
(Learner)
(1881 Points)
Replied 05 October 2013
Samrendra sir
what will be the entry in second case
will it be
Fixed assets
to Capital
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 05 October 2013
Dear Shivani,
NO ENTRY will be made in second case as we can not record any transaction with zero value. Recording in Fixed Assets register track record of assets available for use in business but actually charged to profit and loss accounts fully to prevent assets, from being misused and misplaced.
Shivani
(Learner)
(1881 Points)
Replied 06 October 2013
Samrendra Ji
You mean in second case no entry will be there.
But u said that fixed assets will be charged to PL A/C to prevent misuse.
How can we charge them to PL A/c if fixed assets have zero value ! !
Who said accounts is boring :-)
Shivani
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 06 October 2013
What I mean to say that Fixed Assets register help management to track those assets physically which has not reflecting in books because of its zero value.
Samrendra
(Asst. Manager- Internal audit)
(221 Points)
Replied 06 October 2013
In Second situation No Book Entry only recording in Fixed Assets Register (For safeguarding of Assets)
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