sushant gurav (Accountant) (396 Points)
03 June 2011Sir,
Can u please tell me ,if a new vehicel is purchase and insurance is paid then we will have to add that to the vehicle and show as asset.
Secondly we had paid 10,000/- as token amount to the company from whom we have purchased this new vehicle. Later that10,000/- is returned and a discount of 15000 is given by the Co.(I.e motors company) all together 25,000/- is refunded back to us.
Can u pleaze tell me the accounting entry for this.
Tahnks and regards,
Sushant.
Harpreet
(* * * * * *)
(1670 Points)
Replied 03 June 2011
Yes you can add this insurance (first time at the time of purchase of new vehicle) as fixed assets.
If you have received discount of Rs. 25000/- (10000+15000), you have to reduce fixed assets (vehicle) cost also.
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 03 June 2011
insurance of asset will not be included in cost of asset
if you have received any discount it will reduce your cost of asset
CS,CA F,Numrologi TusharSampat
(CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert)
(85930 Points)
Replied 03 June 2011
| Originally posted by : Harpreet | ||
 |
Yes you can add this insurance (first time at the time of purchase of new vehicle) as fixed assets. If you have received discount of Rs. 25000/- (10000+15000), you have to reduce fixed assets (vehicle) cost also. |
 |
Agreed.
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 03 June 2011
| Originally posted by : Harpreet | ||
|
|
Yes you can add this insurance (first time at the time of purchase of new vehicle) as fixed assets. If you have received discount of Rs. 25000/- (10000+15000), you have to reduce fixed assets (vehicle) cost also. |
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insurance is never an capital expenditure
Harpreet
(* * * * * *)
(1670 Points)
Replied 03 June 2011
KIND ATTN: Mr. Future CA
Pls suggest me that why everyone follows the treatment of following and pls read relevant AS:
You bought a aircondition worth Rs. 20000/- from A and Stablizer worth Rs. 2500/- from B and the same get installed by from C. Pls make the journal entry in books of accounts with relevant AS or treatment of accountancy. I will appreciate your right answer on the same.
Regards,
Harpreet
CA Chintan Vyas
(Chartered Accountant)
(116 Points)
Replied 03 June 2011
Insurance payment at the time of Purchase of new asset would be Capitalised.
At the time of purchasing vehicle, Insurance is mandatory now a days.
WHile at the time of renewal of that insurance, it would be considered as revenue exp.
CS,CA F,Numrologi TusharSampat
(CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert)
(85930 Points)
Replied 03 June 2011
| Originally posted by : CA Chintan Vyas | ||
|
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Insurance payment at the time of Purchase of new asset would be Capitalised. At the time of purchasing vehicle, Insurance is mandatory now a days. WHile at the time of renewal of that insurance, it would be considered as revenue exp. |
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Agreed.
CAclubindia
