while preparing schedule for fixed assets, how do we treat sale of any asset (according to Co's Act)?
CA. Nishant Jain
(Audit Executive)
(411 Points)
Replied 02 August 2010
Dear Bhavna,
While preparing Schedule of Fixed asset as per Companies Act, sale of asset is shown as follows:
For simple understanding, lets take an example
Suppose a company is having only a single asset (Furniture), the gross value of which as on 31.03.2009 is Rs. 50000, Accumulated depriciation as on 31.03.2009 is Rs. 40000. The asset was sold during the year on 28.05.2010 for Rs. 5000, the depriciation on asset till 28.05.2010 Rs. 600(assumed, in real situation depriciation is calculated on no. of days basis).
Before Schedule Lets See the entry of sale of fixed asset in books of account
Bank A/c .............................................Dr. Rs. 5000
Accumulated Depriciation A/c ........Dr. Rs. 40600
Loss on sale of Asset A/c................Dr. Rs. 4400
To Furniture A/c Rs. 50000
Now,
Schedule of Fixed Asset:
| As Per Companies Act | |||||||||
| Name of Assets | Cost as on 01.04.09 | Addition during the year | Sale during the year | Total | Dep. as on 01.04.09 | Dep. during the year | Dep. Adjustment | Total | WDV as on 31.03.10 |
| Funiture | 50,000.00 | - | 50,000.00 | 0.00 | 40,000.00 | 600.00 | 40,600.00 | - | 0.00 |
| TOTAL | 50,000.00 | - | 50,000.00 | 0.00 | 40,000.00 | 600.00 | 40,600.00 | - | 0.00 |
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