NIKHIL KUMAR CHAUHAN (ARTICLE) (41 Points)
08 August 2014
Sabin Pokharel
(student)
(176 Points)
Replied 08 August 2014
I think it is not the case of loss. Assets is not useful for you - it doesn't meant you can book it as loss. However you can change the rate or method(or both) of depreciation and write it off to profit and loss account. Regarding VAT amount deposited, you can claim it back on submission of necessray application along with proofs.
CA. Mayur
(Service)
(147 Points)
Replied 08 August 2014
Accounting treatment in given case will be govern in accordance to "assets held for disposal" as stipulated in AS 10. Accordingly company will be required to measure such assets at net realisable value (considering that NRV is less than cost of asset) and Impairment loss due to measurement at NRV should be recognised in P&L statement. As far VAT is concern Company should be able recover it back from revenue department therefore the same should be recorded in VAT receivable account or account of similar nature.
NIKHIL KUMAR CHAUHAN
(ARTICLE)
(41 Points)
Replied 08 August 2014
CA. Mayur
(Service)
(147 Points)
Replied 08 August 2014
I am not tax expert, to best of my understanding VAT is normally receivable for sale return within six months. However if you believe, that your case does not fall under that scope then probably please take help of tax expert on this matter.
CAclubindia
