If an asset is purchased and eventually sold during same previous year, WHETHER it will form Part of respective block of asset or treated as a separate Capital asset????
CA AMANPREET SINGH (Chartered Accountant) (284 Points)
07 April 2011If an asset is purchased and eventually sold during same previous year, WHETHER it will form Part of respective block of asset or treated as a separate Capital asset????
Shriram Ramachandran
(IPCC Student CWA Inter & Processing officer in GNSA Infotech Ltd)
(492 Points)
Replied 07 April 2011
Devendra
(Chartered Accountant)
(4775 Points)
Replied 07 April 2011
THE ASSET WILL NOT FORM A PART OF THE BLOCK OF ASSET AND YOU WILL ALSO NOT BE ABLE TO CLAIM ANY DEPRECIATION ON THE SAME.
REGARDS,
DEVENDRA K
CA AMANPREET SINGH
(Chartered Accountant)
(284 Points)
Replied 07 April 2011
Thanks Devendra. my personal view is also the same.
Shriram Ramachandran
(IPCC Student CWA Inter & Processing officer in GNSA Infotech Ltd)
(492 Points)
Replied 07 April 2011
But y we should not add to block asset?
Thanks
R Shriram
Devendra
(Chartered Accountant)
(4775 Points)
Replied 07 April 2011
Once the Asset is sold the Asset A/c is credited and the Profit / Loss on the same is transferred to the Profit & Loss A/c. Thus the WDV of the Asset becomes Nil.
Regards,
Devendra
Shriram Ramachandran
(IPCC Student CWA Inter & Processing officer in GNSA Infotech Ltd)
(492 Points)
Replied 07 April 2011
I cant Get u Deve....... Plz tell me once again in someother words..........
R Shriram
Devendra
(Chartered Accountant)
(4775 Points)
Replied 07 April 2011
LET US TAKE A SIMPLE EXAMPLE :
XYZ PVT. LTD. HAS A MACHINERY HAVING OPENING WDV1000000. ON 30TH JUNE THE MACHINERY IS SOLD FOR500000. THEN THE LOSS IS500000 (IE.1000000 - 500000)
THEREFORE, JOURNAL ENTRY PASSED ON SALE OF ASSET IS
CASH / BANK A/C DR. 500000
LOSS ON SALE OF MACHINERY A/C DR. 500000
TO MACHINERY A/C 1000000
(BEING MACHINERY SOLD)
NOW DID YOU GET IT.?
REGARDS,
DEVENDRA
U S Sharma
(glidor@gmail.com)
(21056 Points)
Replied 07 April 2011
Santhosh Poojary
(SIEMPRE AHÍ PARA TI)
(15607 Points)
Replied 08 April 2011
Very Well Explainded by Devendra.
Totally Agree.
Monik Shah
(CA Final)
(39 Points)
Replied 08 April 2011
Suppose W.D.V. of the asset on the first day of P.Y. is Rs. 500000/-.
Depreciation for the relevant P.Y. amounted to Rs. 20000/- which inclusive of Rs. 10000/- is for the personal purpose then what will be the Closing W.D.V. at the end of the year???
praveen
(Chartered Accountant)
(6971 Points)
Replied 08 April 2011
| Originally posted by : U S Sharma | ||
 |
to shift the capital asset in block of asset it must be in fixed assets schedule on closing day, otherwise its normal transfer in and out and any gain positive or negative would be reflected direct in P/L, depriciation on such capital asset is irrelevant as the asset is transferred out in same FY, so depriciation once claimed then again same amount reflected in P/L by way of gains, does not mean anything. |
 |
EXACT LOGIC :D
Deepak Bhardwaj
(ACS, LLB & CA Finalist)
(132 Points)
Replied 08 April 2011
I was very dissatisfied with way students of CA inter are answering the quesitons regarding the block of the asset.
U see as far as purchasing an asset (fixed asset) or a Depreciable asset is concerned as and when u purchase an asset it becomes the part of the respective block and the individual identity of the asset is completely ignored.
And as far as charging depriciation is concerned you all should remember that depriciation is not charged on individual assets rather it is chargeable on that particular block of asset. For further information.. Look for the section 43(6) ' Written down value for charging depriciation'. the only thing you have to taken into consideration while charging Dep at the end is the inclusion or exclusion of that new asset purchased(if it is put to use for less than 180 days)
Deepak Bhardwaj
Shriram Ramachandran
(IPCC Student CWA Inter & Processing officer in GNSA Infotech Ltd)
(492 Points)
Replied 08 April 2011
Sorry Deepak,
We Inter students come directly from +2 by passing CPT to inter stage of CA. So we will get doubt only when we study. So i dont thing nothig wrong in asking doubts like this. We only know how hard to do CA with out any basics in Some areas like this, in those areas oly we are asking doubts. So plz dont comment on us like this.
Sorry if i have said anything wrong
R Shriram.
Rounak Chawla
(CA Final Student)
(291 Points)
Replied 09 April 2011
first add in block of asset wid d purchase cost, dn reduce d sale price of dat asset....
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