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Fixed assets

CA SUMANTH (LEARNER.....) (294 Points)

31 October 2014

hey folks. I have a query. we have sold some computer equipments as e waste. we sold in KGs not in numbers. how shall we retire assets as we can not assign sale value for each asset. wdv on sale date is zero. possible treatment for this as per my judgement is 1. retire assets as gross block and treat receipt on sale as other income. 2. proportion sale value based on gross asset value to each sold asset and account sale value as profit on sale of assets. pls advise me which treatment is corect? regards, sumanth.

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4 Replies

CA Siva Palla (FP&A- Associate Manager) (95 Points)
Replied 31 October 2014

Deduct the sale proceeds from the existing WDV of Computer Equipments block. If there is no WDV at all, sale proceeds would be taxable under the head other sources.

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CA SUMANTH (LEARNER.....) (294 Points)
Replied 31 October 2014

Dear siva, how can I assign sale value to each asset? For eg if I have 200 items of laptop/desktops/accessories which is scraped as e waste, customer buys those based on weight of lot of laptops or desktop along with accesories, where as weight of each asset is not known to us to assign sale value for that particular asset. in the above case can we assign sale value for each asset by proportioning based on gross asset value and compute profit. ( case 1 above) Or as case 2 can i consider receipts from sale as other income directly without proportioning salevalue for each asset, and retire asset at gross value.