AS 10 Fixed assets
This query is : Resolved
04 February 2009
If an old Fixed asset (WDV - Rs 5000) exchanged for new machinery (fair market value - Rs 10000)
What will be the accounting treatment?
What will be the accounting treatment?
04 February 2009
If you have sold one machinery type called x and you are purchasing the same type of machinery x then you should arrive the value like this. New purchase 10000- sold 5000 net cost is 5000.
Fixed Assets 5000
To bank 5000
Fixed Assets 5000
To bank 5000
05 February 2009
Sir, there is no cash transaction. Simply new asset has been acquired in exchange of old asset.
So the new asset should be recorded in books at which value?
In case recorded at new asset FMV, then how to treat the difference of 5000 Rs. (Will it be deemed to be treated as profit on sale of old asset & Cr to P&L A/c?)
So the new asset should be recorded in books at which value?
In case recorded at new asset FMV, then how to treat the difference of 5000 Rs. (Will it be deemed to be treated as profit on sale of old asset & Cr to P&L A/c?)
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24 September 2011
New Machinery A/c Dr. Rs. 10,000/-
To Old Fixed Asset Rs. 5,000/-
To Profit on Disposal of Asset Rs. 5,000/-
To Old Fixed Asset Rs. 5,000/-
To Profit on Disposal of Asset Rs. 5,000/-
24 September 2011
according to AS-10 in the case of exchange of assets, value of assets will be taken ---- fair value of assets given up or fair value of assets received which is more clearly evident.
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