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Advance paid for Building (Accounts)

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This query is : Resolved


( Author )
15 March 2009

Dear,

Let me know about the entry to be passed and the effect of the transaction as given:

One flat is purchased in the underconstruction builidng which will be completed in next 3 years but advance to be paid from the 1st year i.e. on the date of purchase so how can i show it in financial and the effect of it.



CA.SHAHZAD SAYYED

( Expert )
15 March 2009

You have to Pass the enrty by debiting the "Advance for Flat/Building A/c" upto 3 yrs, this A/c is temporary A/c which will eliminated after getting posesssion of Flat/Buidling
once Flat/Building is completed and you will get posession then Debit The "Flat/Building A/c" and credit the "Advance for Flat/Building A/c"


CA Devanshi Gandhi (Ajani)

( Expert )
15 March 2009

its right


Mihir Doshi

( Author )
15 March 2009

Thxs for kind reply. But it comes under Investment in properties or any other head?


CA.SHAHZAD SAYYED

( Expert )
15 March 2009

The temporary A/c will come under Advances and Deposit which is open under current Asset and after getting possession it will come under Fixed Assets
However if the nature of business is bying and Selling such properties then after getting possession it will come under Investment


Mihir Doshi

( Author )
15 March 2009

Thxs Shahzad


CA.SHAHZAD SAYYED

( Expert )
15 March 2009

Oh you r online
OK


Mihir Doshi

( Author )
15 March 2009

yes i m online


CA.SHAHZAD SAYYED

( Expert )
15 March 2009

Nice to Talk with you
you can contact me on my email ID
cashahzad@icai.org


Mihir Doshi

( Author )
15 March 2009

Even me too
Thxs for reply.


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