sadguna chary (CA Final) (34 Points)
12 March 2009
CA Abdul Halim Siddiqui
(Partner)
(481 Points)
Replied 12 March 2009
NO TREATMENT OF PURCHASING CO. IS NOT CORRECT SINCE WAIVER OF RETAINED AMOUNT AMOUNTS TO CAPITAL PROFIT & NOT REVENUE PROFIT . HENCE COST OF CAPITAL ASSETS SHOULD BE ADJUSTED
CA.Tarun Maheshwari
(CA, DISA)
(7150 Points)
Replied 12 March 2009
Rs. 10 is in the nature of discount, the value of fixed asset has to be reduced by this amount. Can not be transferred to P&L Account.
sadguna chary
(CA Final)
(34 Points)
Replied 12 March 2009
| Originally posted by :CA.Tarun Maheshwari | ||
| " | Rs. 10 is in the nature of discount, the value of fixed asset has to be reduced by this amount. Can not be transferred to P&L Account. | " |
Thank u for the reply,
1)how long a company have trace of such changes
2) state the impact on deprecation
CA.Tarun Maheshwari
(CA, DISA)
(7150 Points)
Replied 12 March 2009
1. When the seller agreed to waive off the amount, you can make an entry to this effect, and take confirmation from the seller in this respect.
2. In my opinion, Depreciation should be reversed proportionately with this amount.
PiyushAgrawal
(Chartered acooutant in practice)
(575 Points)
Replied 12 March 2009
| Originally posted by :sadguna chary | ||
| " | PQR ltd purchased a Fixed Asset from LTR ltd for Rs 100 (say), PQR ltd paid Rs 90 and retained Rs 10 as retainings. After one year,LTR ltd waived Rs 10, hence PQR ltd credited Rs 10 to P&L Account. Is the treatment of PQR Ltd is correct?, Is it required to alter the cost of the Asset. | " |
Ya as per AS10 discout shud be adjusted to original cost of assets. dep should be charge on remaing value of fixed assets.
CAclubindia
