gauri (student) (114 Points)
13 March 2014When the value of assets as taken over by the purchasing company is at a value that is different from the one appearing in the books , why do we still record the assets at book value?
Please reply :)
Manoj Mehta
(Head Of Department (Accounts & Finance))
(1479 Points)
Replied 13 March 2014
Dear gauri
Please expain your doubt with some amounts ... question is not clear.
Manoj Mehta
(Head Of Department (Accounts & Finance))
(1479 Points)
Replied 13 March 2014
CA Saroj Kumar
(Keen to learn something new every moments)
(2588 Points)
Replied 13 March 2014
Relisation accounts are prepared to find out profit or loss on disposal of assets. While we making disposal of assets we take's all book value of assets and liability in corresponding side and taking realisable value in credit side. Anf after balancing it shows the net effect on disposal.
If u will take purchasing price even though u have to deduct book value to find out profit or loss. hence first transfer all assets at book value and then write relisable value to credit of relisation account.
gauri
(student)
(114 Points)
Replied 13 March 2014
Hey Manoj,
Yes I am talking about preparing a realisation account during amalgamation. :)
CA Saroj Kumar
(Keen to learn something new every moments)
(2588 Points)
Replied 13 March 2014
Rahul jain
(LEARNING & TEACHING)
(435 Points)
Replied 14 March 2014
in amalgmation we take the asset and liabilities at book value not on market value...
as the historical cost concept.....
Rahul Agarwal
(FINANCE ASSOCIATE AT ICMAI)
(149 Points)
Replied 05 July 2021
CAclubindia
