Advance paid for Building

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Mihir Doshi (Querist)
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15 March 2009 Dear,

Let me know about the entry to be passed and the effect of the transaction as given:

One flat is purchased in the underconstruction builidng which will be completed in next 3 years but advance to be paid from the 1st year i.e. on the date of purchase so how can i show it in financial and the effect of it.

CA.SHAHZAD SAYYED

CA.SHAHZAD SAYYED (Expert)
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15 March 2009 You have to Pass the enrty by debiting the "Advance for Flat/Building A/c" upto 3 yrs, this A/c is temporary A/c which will eliminated after getting posesssion of Flat/Buidling
once Flat/Building is completed and you will get posession then Debit The "Flat/Building A/c" and credit the "Advance for Flat/Building A/c"

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)
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15 March 2009 its right

Mihir Doshi

Mihir Doshi (Querist)
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15 March 2009 Thxs for kind reply. But it comes under Investment in properties or any other head?

CA.SHAHZAD SAYYED

CA.SHAHZAD SAYYED (Expert)
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15 March 2009 The temporary A/c will come under Advances and Deposit which is open under current Asset and after getting possession it will come under Fixed Assets
However if the nature of business is bying and Selling such properties then after getting possession it will come under Investment

Mihir Doshi

Mihir Doshi (Querist)
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15 March 2009 Thxs Shahzad

CA.SHAHZAD SAYYED

CA.SHAHZAD SAYYED (Expert)
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15 March 2009 Oh you r online
OK

Mihir Doshi

Mihir Doshi (Querist)
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15 March 2009 yes i m online

CA.SHAHZAD SAYYED

CA.SHAHZAD SAYYED (Expert)
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15 March 2009 Nice to Talk with you
you can contact me on my email ID
cashahzad@icai.org