one of my client had mistakenly shown sale of fixed asset as regular sales and not written off asset from books of accounts last year i.e. 2020-21?
Then how to rectify entry in the current year i.e. 2021-22.....
If they have done it simply like this,
Dr. Bank
Cr. GST
Cr. Sales
then calculate how many days you have kept the asset in Held for Sale classification, take out depreciation, derecognise asset, recognise gail or loss on sale and finally, derognise any liabilities associated with the asset. Or better, use prior period adjustments and reverse he sale and tax consequences. Then redo the sale transaction leaving a disclosure.
CAclubindia
