Agreement to sale land
This query is : Resolved
13 April 2016
If only agreement to purchase land at fixed amount on fixed date in future made then whether there is any entry to be made in books of accounts of purchaser and seller?
Sandeep Garg
(Expert)
13 April 2016
No entry to be made in books of account until any transaction takes place like payment of advance etc.
14 April 2016
Yes Sir,but in case of big Company if this Company make agreement to purchase land from any person(seller) at fixed price in fixed future date though there in no outflow of money in form of advance or otherwise,How this company disclose this information to its stakeholders?
Sandeep Garg
(Expert)
14 April 2016
It may be disclosed as capital commitment...but legal agreement should be there
14 April 2016
Yes Sir...it will be disclosed in capital commitment in notes to accounts in balance sheet in auditor's report..right?and no accounting entry made
Sandeep Garg
(Expert)
14 April 2016
Yes only in notes to accounts...no accounting entry required as no inflow / outflow of funds is there and no ownership transferred.
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