Urgent query

AS 521 views 4 replies

Nikita

54 Points Joined April 2012

I wanted to know that, Chartered Accountants usually maintain a whole library of books which has annual publications added every year as well as permanent books. We also have student journals, and professioal journals that we receive on a monthly basis. Then as per Accounting Standards will they be treated as Inventory under AS-2 or Fixed Assets under AS-10 and why, also what will be the tax treatment for the same and treatment as per Audit Standards??

Replies (4)

Devendra

Chartered Accountant

4780 Points Joined March 2009

Ready Recknors, Income Tax Acts shall be written off to the profit and loss account. Whereas Professional Magazines, Student's journals and other reference books can be classified as Fixed Assets and depreciation can be claimed @ 60% on them. Regards, Devendra Kulkarni

Dhawal Mohnot

Practicing

449 Points Joined October 2009

In my view. All such books can be expensed off as Books and Periodicals. Since the lifetime of any book is not more than 1 year, as new edition is printed every year and such new edition precedes the old edition. Hence it cannot be said that useful life of a book is more than one year.

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MANIKANDAN S

B.Com

39 Points Joined February 2013

For Income-Tax and Accounting Standard details mostly we prefer only latest edition. The old edition book may not be used if new edition printed. Considering this, books with useful life 1 year is normal and we can charge-off these to P&L instead of accounting this under FA.