Cession of Liability
This query is : Open
ashwani agrawal
(Querist)
06 September 2010
Hello
If a indian co. purchase a fixed assets for Rs.4.5 crore on credit from a forign co.but after 2 yr that forign co. is insolvent and did not claim his amt.
I want to know what is entry as per AS(accounting standard) and wht is tax implement as per income tax.
If a indian co. purchase a fixed assets for Rs.4.5 crore on credit from a forign co.but after 2 yr that forign co. is insolvent and did not claim his amt.
I want to know what is entry as per AS(accounting standard) and wht is tax implement as per income tax.
07 September 2010
In my opinion the liability(Accounts Payable/Sundry Creditor) will be written back and reflected as other income in P&L without affecting the Fixed Assets which was already accounted when the FA was purchased.
1)FA Dr 4.5
To Sundry Creditors 4.5
2)Sundry Cr Dr 4.5
To Other Income 4.5
This amount becomes taxable,however the depreciation on FA is allowable deduction in computing taxable income.
More opinion is solicited.
1)FA Dr 4.5
To Sundry Creditors 4.5
2)Sundry Cr Dr 4.5
To Other Income 4.5
This amount becomes taxable,however the depreciation on FA is allowable deduction in computing taxable income.
More opinion is solicited.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Capital Gail Exemption Certificate
- Taxation of crypto futures in India Fy 2026- 2027
- EPF ECR NEW RULES Sep 17th 2026
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- Issuing of delivery challan by seller of goods
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
