Depreciable capital asset

VIKAS.A (SOMETHING IS BETTER THAN NOTHING) (1095 Points)

30 March 2013

Can a Depreciable capital asset which is used for the purpose of business can be converted into stock in trade?

if yes then how it is calculated?

thanks in advance.

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Nazia (Asst Manager - Finance) (139 Points)
Replied 01 April 2013

Yes. depreciable asset can be converted into stock, u have to consider the market value at which it should be transferred to stock.

As per IT act : Such amount shall be reduced from the block of assets ( same procedure as if it were sale of fixed asset).

For accounting : Difference between conversion value and wdv is treated as loss or gain on sale of asset

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