what is the treatment for stale cheques in case of E cheque payments.i.e E cheque prepared and not authorized in Internet Banking. Please advice.

Company Profile: Manufacturing Concern.
Issue related to: Investment in New Project/ Expansion of existing units.

As per different contracts placed by the company, LD has been levied and collected from the payable bill amount to the contractors/ suppliers on account of delay in supplies and delay in work completion.

My concern is as what treatment should be done with the LD so collected.

Op.1: To deduct same from the Project Cost

If it can be established that the LD is in fact received in mitigation of the extra project costs incurred and capitalised by the company on account of the same specific events which gave rise to liquidated damages and that the said damages can be identified with the project, the Committee is of the opinion that the liquidated damages can be adjusted in the cost of the project.



Op.2: Show the equipment with full Cost and LD in P&L A/c as Other Income.

ICAI Expert Opinion:
LD is not directly attributable to the acquisition of capital equipment like trade discount and rebates.
They are also not adjustments in the price of the equipment. The damages results from inefficiency on the part of the supplier/ contractor. In view of this LD received form the supplier cannot be adjusted in the cost of purchase.

My stand is that in a project we are having hundreds of contract for different supplies and works. The delay can not be neck to neck match with the mitigation of extra cost of project or loss of production hence LD should be shown in P&L as "other income" however it also cannot be said that due to this delay extra finance is not spent (because there is financial loss towards project team's salary and salary of the contractor's expert for supervision).

Now what to do ?

Dear sirs,

Seek you advise on the following:-

We have procured a milling plant under deferred credit facility in CHF currency.Though the plant shall be supplied by the end of the year but the CHF rate seems to be fluctuating to much

If I adopt the rate on the day of txn I may end with a value that shall be "XX" for the capitalisation of the plant but subsequent payments to the supplier is the issue.
We shall be paying 6 monthly instalment in CHF so how do we treat the exchange. (since looking at the variation in the CHF rate the variation in expected to be too high).

Can we show it as change in the value of the asset every year or do we treat it as revenue expenditure & write it off. (Though there is no increase in the efficiency of the asset or its productivity )

Any Suggestion shall be most welcome.

Thanks & regards

Dear sir to all,


I wanna diposit 100000 rs(cash) in our bank.
what the entry of our ledger. and why

can u tell me.

Dear all,

A Company purchased a depreciable capital asset in 2007 and on the date of purchase there was no certainity regarding the receipt of government grant. However in 2010 it received government subsidy related to that asset. Now my question is that what will be the accounting treatment for subsidy received and whether the depreciation which has been claimed in earlier years will be added back in asset?

sir please help me please check this is it right ROI



Discription Expense INR Expense Euro Remarks
Establishment Cost 2,220,000 34154
Machenery Cost 13,000,000 200000
Machinary fixation and trail run cost 0
Rent Cost 100,000 1,200,000 18462
Fixed Expenses 100,000 1,200,000 18462
Production Cost 0 0
Raw Material Cost 437,500 5,250,000 80769
0 0
Electicity cost 50,000 600,000 9231
Manpower cost 300,000 3,600,000 55385
Transpotation Cost 100,000 1,200,000 18462
Marketing Cost 100,000 1,200,000 18462
ToTal expenditure 16,407,500 14,250,000 453385




Mnufacturing cost per ton Sale per ton EBIT
RS 40,000.00 RS 60,000.00
Ist year sale (30 tons) RS 14,400,000.00 RS 21,600,000.00 RS 7,200,000.00

2nd year sale (50 tons) RS 24,000,000.00 RS 36,000,000.00 RS 12,000,000.00

3rd year sale (70 tons) RS 33,600,000.00 RS 50,400,000.00 RS 16,800,000.00

EBIT for 3 years RS 36,000,000.00


Total investment RS 87,220,000.00


ROI for 3 years 41.27493694



ROI = profits/capital Employed


profits = Sales-Manufacturing cost

Manf. Cost = Manpower+overheads+Material


Capital Employed = Fixed assets+current Assets

Dear Sir,

Request to explain in detail on the below mentioned caption:

"convert part of rupee loans into low-cost forex loans"

My queries are:
1.By converting rupee loans into forex loans what are the accruing benefits?

2.Is it allowed in India?

3.If YES for sl no 2,then what is the procedure and rules to follow?

4.Is it meant ONLY FOR CORPORATES OR INDIVIDUAL INDIAN CITIZENS CAN ALSO AVAIL THIS OPTION.

5.What will be the rate of interest eligibilty etc., for individuals.

Request full clarification for the above.

Thanks and regards
Francis

DEAR EXPERTS

PLZ TELL ME WE HAVE SUPPLIED THE GOODS TO PARTY "A" & SIDBI GIVE US PAYMENT ON BEHALF OF PARTY "A" AFTER DEDUCTING THE 1%MONTHLY INTEREST (TERMS 90DAYS).

WHAT ENTRY IS PASSED IN OUR BOOKS

Sir , can you please tell me what is joint venture actually is , what is the purpose of its formation .

mother has deposited Rs. 10,000 & open new a/c in the name of his minor child in HDFC account by joint operation.

Query 1
how to give this effect now in the books of mother & minor?

Query -2
and when minor became major what will be effect of same in the both books?


pl tell me solution of Query :2