We have a stock item in our invetory as on 31/03/2012 of value Rs. 10000/- but due to bad condition that can not be sold to any one. so we have given that to our one of employee without any money consideration. so could you plese how can we treat it in our account. what account need to be debit to charge P & L?
03 July 2012
First off all, while finalising March 31, 12, you will have to value the inventory at cost or NRV, whihc ever is lower. Hence most of the down side will come as impairment.
Balance value will come as a debit in next years P&L in the form of decrease in inventory with no correspinding revenue.
CAclubindia
