Agreement to sale land

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CA Sweta (Querist)
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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

Sandeep Garg (Expert)
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13 April 2016 No entry to be made in books of account until any transaction takes place like payment of advance etc.

CA Sweta

CA Sweta (Querist)
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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

Sandeep Garg (Expert)
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14 April 2016 It may be disclosed as capital commitment...but legal agreement should be there

CA Sweta

CA Sweta (Querist)
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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

Sandeep Garg (Expert)
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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.

CA Sweta

CA Sweta (Querist)
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14 April 2016 Ok Sir,Thank you very much.

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