Treatment of extraordinary/exceptional items

Indian Accounting Standards 6226 views 3 replies

Girish

Student

67 Points Posted on 09 May 2013

Hi Friends,

I require to know the treatment in the books of company of following transactions & disclosure in the accounts as per Revised Schedule VI:

1. Rs. 1 Cr. received from the party which was written off as bad debts during earlier years.

2. Rs. 50 Lakhs has been written off during the FY out of the "Advance given to suppliers" due to dissolution of such company and no response even after several correspondences to refund that amount.

Will the above amount received/recognized will become Extraordinay or Exceptional items? Then how to treat those?Kindly refer Accounting Standards applicable in your reply.

Thanks in Advance

Girish

Replies (3)

swati jadhav

student

22 Points Posted on 16 August 2013

Respected Sir,

plzz.... tell me the meanings of exceptional items & extra ordinary items with examples...........

CA Subin VR

Practicing CA

450 Points Posted on 17 August 2013

Refer AS 5.

The above mentioned items are not extra ordinary items but ordinary items which require special disclossure as per AS 5.

Extract from AS 5

When items of income and expense within profit or loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such items should be disclosed separately

Shivam Gupta

Job as JAO ( Deputy Manager - Accounts)

489 Points Posted on 20 August 2013

100% agree with CA Subin Sir,

Both the transactions referred in the question are exceptional items and are to be disclosed on the face of the profit & loss account in the given format.

Thanks