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Creditors for capital asset

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(Querist)
30 January 2008
Can anyone guide me on the following?

A company has acquired leasehold land for a substantial value compared to its turnover ( nearly 10%.) The same is shown in Sundry Creditors.
I want to know about the possible voilations in presentation of financial statements and computation of Working capital Gap? To me this appears as utilisation of short term funds for long term investment. Please clarify.
At present, I am not able to know the source of finance for this acquisition.
Thanks in advance.
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Amit

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Amit (Expert)
30 January 2008 Dear Ashwini,

Creditors for capital goods ia laways shown as Creditors only. So i dont think there is any misrepresentation in financial statement. However, utilisation of short term funds for long term purpose can be judged only from source of finance only.
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Amit

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Amit (Expert)
30 January 2008 Dear Ashwini,

Creditors for capital goods ia laways shown as Creditors only. So i dont think there is any misrepresentation in financial statement. However, utilisation of short term funds for long term purpose can be judged only from source of finance only.
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Devendra Mishra

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Devendra Mishra (Expert)
30 January 2008 Even I have the same opinion that there is no need to show seperately crediotrs for capital goods
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Ashwini

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Ashwini (Querist)
30 January 2008 Thanks for response.
I will check for the funding arrangement and come back.

Anyways, thanks.
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