Dear Members
dismantling expenses incurred to sale a Machinery .What will be the treatment ?
Thank you
V P Narasimhan
(Accounts Manager)
(791 Points)
Replied 12 March 2015
Shiv prakash
(000)
(87 Points)
Replied 12 March 2015
You can Reduce Expense amount form the Gross sale amount.
srutha keerthi
(Student CA Final )
(29 Points)
Replied 13 March 2015
I also think that it should be reduced from sale consideration.
In capital gains, you reduce selling costs from sale consideration along with costs, to arrive at capital gain.
The same logic applies here also.
It is not an ordiary repair in the due coure of business hence it cannot be accounted under that head.
Also while preparing cash flows, accounting such repairs in operating activities would mislead as it is not an operating expenditure.
CAclubindia
