is the loss on sale of fixed assets a capital loss/revenue loss? other than p/l whereelse we can chrg it?
8 Replies
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 08 June 2011
fixed assets where depriciation is availed, any loss at the time of sale when its less than wdv, can be reflected in P/L account
fixed assets where depriciation is not availed, ( personal effects) no such provision to claim loss, it would be capital loss.
Arundhati Raychaudhuri
(no designation)
(340 Points)
Replied 08 June 2011
how to show capital loss in d balance sheet? will i debit goodwill account?
MANOJ SHRIPATI
(CA FINAL)
(56 Points)
Replied 08 June 2011
AS PER A.S 10........
LOSS ARISING OUT FROM SALE OF FIXED ASSETS SHOULD BE RECOGNISED IN THE STATEMENT OF PROFIT AND LOSS A/C...AND HENCE IT IS REVENUE LOSS...
BIFIRCATION IS NECESSARY ONLY IN CASE OF PROFIT......
IF SELLING PRISE IS MORE THAN ORIGINAL COST THE DIFFERENCE BETWEEN O.C AND S.P WILL BE TREATED AS CAPITAL PROFIT AND WILL BE TRANSFERD TO CAPITAL RESERVE....
nikhil
((CA Final) Article)
(363 Points)
Replied 09 June 2011
If u have showed your fixed asset in balance sheet that means u have capitalise that and deduct deprication on yearly bases....so deduct deprication of all year from the cost of fixed asset i.e
Selling price - (Fixed assets - deprication of all year on that particular fixed asset) this way u will calculate gain or loss
If there is loss on fixed it will be shown in dr side and if profit then in credit side of p/l
It will be revenue loss ....
sameeksha
(student)
(49 Points)
Replied 10 June 2011
As per AS-10 '' Accounting for Fixed Assets"
In case of previously revalued fixed asset- if there is loss on sale, then it can be adjusted against the balance of revaluation reserve(revaluation of same asset) if any and the balance is debited to P&L A/c.
In case of other fixed assets- charged to P&L A/c.
As per AS-5" Net profit or loss for the period, prior period items, and change in Accounting policies"
Loss on sale of fixed asset is an ordinary activity. The nature and amount of such item should be SEPARATELY disclosed in P&L A/c.
Aparna Raja K.C
(Student)
(520 Points)
Replied 10 June 2011
Debit the loss on account of sale of Fixed asset in P&L....
Generally Capital loss is not taken to balancesheet :)
<i have never come accross such a treatment>
it is adjusted with profit:)
rakeshkuma
(B.COM CA FINAL)
(43 Points)
Replied 15 June 2011
AS 10 clearly speltout that loss or profit on sale of fixed asset should be recognised in P&L account.
and as manoj said. profit on sale of fixed asset over and above depriciation written off on that asset should transfer to genaral reserve
Neethi V. Kannanth
(.)
(19020 Points)
Replied 20 January 2021
When should the profit or loss on sale of fixed asset be recognized if maintaining several assets in the same block?
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