Asset was booked and creditors was created on 10/08/2016.
Depreciation was claimed on asset for 31/03/2017 , 31/03/2018 and 31/03/2019.
Now on 01/02/2020 it is decided that as per the contract terms and conditions no need to do payment to the above creditor
Now what should do of the WDV of Fixed Asset and depreciation already claimed ?
What is the income tax implications of this?
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Depreciated Asset
Replies (5)
Hitesn
I doubt
creditors if u don't pay any input claimed on account of gst will have to be paid back as output tax..
2.you hv to convince your creditors...
3. sec 41 there is a clause..
any liabilities not paid can be added back as income.
depreciation claimed on assets is a different aspect...
I doubt
creditors if u don't pay any input claimed on account of gst will have to be paid back as output tax..
2.you hv to convince your creditors...
3. sec 41 there is a clause..
any liabilities not paid can be added back as income.
depreciation claimed on assets is a different aspect...
It is before GST so, question of credit not arise
secondly it is not debited to profit and loss account as it is fixed asset
secondly it is not debited to profit and loss account as it is fixed asset
Your question was creditors once created is not required.
creation of creditors has no direct association with profit but indirect.
which one is before gst?
depreciation on assets has an impact on profit loss..
creation of creditors has no direct association with profit but indirect.
which one is before gst?
depreciation on assets has an impact on profit loss..
Now what should do of the WDV of Fixed Asset and depreciation already claimed ?
Just give reversal entry made on 10-8-2016.
Creditors Dr.
To Asset Account (WDV)
To Prior period Items
What is the income tax implications of this
The above reversal entry will take care of IT impact.
-------
Just give reversal entry made on 10-8-2016.
Creditors Dr.
To Asset Account (WDV)
To Prior period Items
What is the income tax implications of this
The above reversal entry will take care of IT impact.
-------
@ bhadiyadra
a seperate account is not required
its assumed here accounts were successfully prepared.
depreciation of prior period correctly accounted for and claimed .
So no errors.
where does prior period account arise here?
You can reverse the creditors.
But there is a possibility it can be added back to.profit
a seperate account is not required
its assumed here accounts were successfully prepared.
depreciation of prior period correctly accounted for and claimed .
So no errors.
where does prior period account arise here?
You can reverse the creditors.
But there is a possibility it can be added back to.profit
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