If company is registered in a year 2013 & incurred expenses of 85 lacs in a year which includes Salry,rent ,electricity,depreciation etc expenses against this expenses, Company has generated revenue of Rs. 26 lacs only as compani's sale is on initial stage (Product is new in market) & hence loss of Rs.59 Lacs.

This loss might be for initial 4 to 5 year & then onwards company is going to have in profitable stage.

What to do in such kind of situation in Accounts? Can company capitalise expenses in initial years(As Pre-Operative or in other manner)?

If yes, in which head in Balance sheet? & how same can be write off in P&L a/c after 4 to 5 years.

Kindly reply.

Sir,

I want to know if a dealer makes sales to us as on 28-03-2013 and we are receiving the goods as on 05-04-13 .

so how to take this entry in our books of accounts .

and also what will be the treatment of taxes like vat etc .

A Govt. company is having gratuity plan with LIC since 1992. The benefit that the employees are provided on account of gratuity is @15 days salary for every completed year limited to maximum of Rs.3,50,000.00. Whenever the payment of Gratuity arises to any employee, LIC credits the amount to the Company and the Company pays the amount to the employee.
Company has been paying the contribution every year as demanded by LIC and books the same as expenditure. Other than this no liability or planned asset is being shown in the books of the Company.
After the non compliance being reported by the statutory auditors, they have obtained a Gratuity report under AS -15 for the year ended 31.03.2012 from LIC. Now for the year ended 31.03.2012 they want to pass the entry in compliance with AS 15. The books of accounts for the year 2011-12 are not closed yet. The report obtained from LIC is as detailed below. Kindly advise what entry has to be passed and whether entries should be passed on the basis of the report obtained from LIC, or any other actuarial valuation is required.
1. Assumption as on 31/03/2011 as on 31/03/2012
Discount Rate 8.00% 8.00%
Salary Escalation 7.00% 7.00%

2. Table showing Changes in Present value of obligation as on 31/03/2012
Present Value of obligations as at the beginning of year 34374452.00
Interest Cost 2749956.00
Current Service Cost 1295640.00
Benefits paid (1988514.00)
Acturial (gain)/ loss on obligation (3178712.00)
Present value of obligations as at the end of the year 33252822.00

3 Table showing changes in the fair value of plan assets as on 31/03/2012
Fair Value of plan assets at beginning of year 18322660.00
Expected return on plan assets 1747545.00
Contributions 5949769.00
Benefits Paid (1988514.00)
Fair Value of Plan Assets at the end of year 24031460.00

4 Table showing fair value of plan assets
Fair Value of plan assets at beginning of year 18322660.00
Actual return on plan assets 1747545.00
Contributions 5949769.00
Benefits Paid (1988514.00)
Fair Value of Plan Assets at the end of year 24031460.00
Funded Status (9221362.00)
Excess of Actual over estimated return on plan assets NIL
Actual rate of return = Estimated rate of return as ARD falls on 31st March

5 Actuarial Gain/ Loss recognized As on 31.03.2012
Actuarial (gain)/ loss on obligation 3187712.00
Actuarial (gain)/ loss for the year – plan assets NIL
Total (gain)/ loss for the year (3178712.00)
Actuarial (gain)/ loss recognized in the year (3178712.00)

6. The amounts to be recognized in the balance sheet and statements of profit and loss
Present value of obligation as at the end of year 33252822.00
Fair value of plan assets as at the end of the year 24031460.00
Funded Status (9221362.00)
Net asset/ (liability) recognized in balance sheet (9221362.00)

7. Expenses Recognised in statement of profit and loss
Current service cost 1295640.00
Interest Cost 2749956.00
Expected return on plan assets (1747545.00)
Net actuarial (gain)/ loss recognized in the year (3178712.00)
Expenses recognized in statement of profit and loss (880661.00)

Note: The above report is not certification under AS-15 revised 2005 read with Actuaries Act, 2006. It is simply a report generated to help companies for proper accounting of employee liabilities

In the year 2011-12 Rs. 60,00,000.00 was demanded by the LIC and paid by the Company has been booked as expenditure.
If net liability of Rs.92.21lakhs has to be shown then which account will be debited because the company will show the liability for the first time in its books?
If 8.80 lakhs is the expenditure then what accounting entry is to be passed?
What accounting entry is to be passed for the contribution of Rs.60.00 lakhs.

i am very confuse how to do entry of foreign remittance .. example if company rec 500usd from our client ..and after it this 300 usd convert in inr. what is the entry of rec usd and converison of amount in inr . help me in this entry.

My client is a charitable Trust registered U/S12A of IT Act.The Trust Granted MLC Grant of Rs 10 lakh for Building costing Rs 40 lakh.The said work of construction was given to a cotractor.The Govt Dept paid Rs10 lakh Grant directly to the Contractor & the balance amount of the bill paid by the Trust.

Please suggest me in Accounting treatment of this Grant according to AS 12& for the purpose of 12A of the IT Act

Sir I would like to know if we are transact a loan and facing losses in foreign exchange at the end of yr & payment has been made after two years..does it qualify the definition of AS-22 to create D.T.A in books of accounts ??

Dear Experts, Please tell me the use of waybill along with its application proceedure and documents requirement.Thanks in advance

Dear All

By how much value we can take as Fixed assets .

in your company purchases a Battery of Rs.7000/- can we take it as fixed assets.

Other wise it comes under which head
Thanking You

Amruth kumar

insurance paid at the time of purchase of car. wheather insurance paid to be capitalised or not???

In case refregerator given by any coke, pepsi, ice cream companies for storing coke, ice creams, choklates etc. to shopkeeper. Then how it deal in the books of companies.

Please suggest accounting treatment