Cession of Liability
This query is : Open
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
- Section 54F - Exemption on LTCG in 2026 for HP purchased in 2023
- STCG....................................................
- TAN for Partnership
- AMOUNT RECEIVED UNDER COMPULOSRY ACQUISITION OF AGRICULTURAL LAND
- Treatment of Pension ?annuity returns on PMVY
- Free lancer income
- LTCG for Assmt year 26-27
- CA IPCC Registeration in 2012, Is my registration Active or Expired
- Last year TDS Claim
- Loan by Partnership Firm
- Gst invoice numbering and delivery challan numbering
- Standard Deduction claim for EPFO Pension and ICICI Prudential Life Annuity
- Small dealers gst returns filing
- Sales amount in Gstr1
- CG after sale of flat
- E Commerce GSTR1 & 3B how to file
- Nomination of Bank for refund in itr 2
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
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
