06 April 2010
Trial run production cost should be capitalised with the cost of plant and machinery from which the production was generated.
If those trial run production units are sold, the amount realised from the sale of above items should be deducted from the cost of plant and machinery and if unsold, nothing to be done after capitalising.
07 April 2010
Dear Experts firstly thanks for your prompt response. In continuation of my query... What is the treatment if the trial production is sold in the subsequent year also in the current year will the same be considered for calculation of increase\decrease in stock to be shown in p&l account
07 April 2010
Dear Experts firstly thanks for your prompt response. In continuation of my query... What is the treatment if the trial production is sold in the subsequent year also in the current year will the same be considered for calculation of increase\decrease in stock to be shown in p&l account
08 April 2010
whenever the trial run production will be sold out, the sales proceeds will get credited to Asset A/c. The same has already been mentioned by Deepika.
09 April 2010
cost of trial run production is debited to asset A/c n sales proceeds will also get credited to Asset A/c so there is no question of valuation of stock or its effect on P/L A/c In case u hv any further doubt, revert back to me. Regards, CA Shakuntala Chhangani
CAclubindia
