Accounting treatment
This query is : Resolved
09 June 2013
Dear Fellow Members,
Please advise me in following scenario-
XYZ is a public listed company. Local government has taken 10% of its land due to the local government's road extension project without giving any compensation. The company follows cost model for its fixed assets.
And now the question is simply passing an entry of derecognising the proportionate amount of land assuming a disposal of assets while charging profit is must or there are any other way out is here?
Please note standards for impairment is not applicable here due to carrying amount is much lower than the fair market value.
Laba Khatri
Member
Please advise me in following scenario-
XYZ is a public listed company. Local government has taken 10% of its land due to the local government's road extension project without giving any compensation. The company follows cost model for its fixed assets.
And now the question is simply passing an entry of derecognising the proportionate amount of land assuming a disposal of assets while charging profit is must or there are any other way out is here?
Please note standards for impairment is not applicable here due to carrying amount is much lower than the fair market value.
Laba Khatri
Member
13 June 2013
PLS MENTION IN NOTES OF ACCOUNTS
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