Demo vehicle
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
11 October 2013
What is the financial implication of Demo car in the books of pvt ltd co.? Is it treated as fixed asset or inventory?
Does demo cars have RC?
Does demo cars have RC?
11 October 2013
Hello Anonymous,
Inventory is something which is stored or coverted from raw material for sale in normal course of business.
However if any company has produced 100 cars and sent to its distributors, for distributor 100 cars are inventory and from 1, he is using as demo car.
So this demo car is still will be counted in his inventory. howvere this can be categorised as inventory held not for sale. Further when you like, can sell this asset and reduce the stock of inventory. There will be no problem at all.
Aadish
Inventory is something which is stored or coverted from raw material for sale in normal course of business.
However if any company has produced 100 cars and sent to its distributors, for distributor 100 cars are inventory and from 1, he is using as demo car.
So this demo car is still will be counted in his inventory. howvere this can be categorised as inventory held not for sale. Further when you like, can sell this asset and reduce the stock of inventory. There will be no problem at all.
Aadish
Message likes :
1 times
Querist : Anonymous
Querist :
Anonymous
(Querist)
11 October 2013
And what about RC?
11 October 2013
Its not require always to take RC for demo vehicle, Some Distributors take RC some does not. According to me if you have permanently decided to use that car as DEMO car and you will not sell in near future, then its better to reduce it from inventory and show it as FA, and charge Depreciation as per the rate. Now when you will sell it say after 2 years 5 years, Book value and Realisable value will be compared and book loss or profit on sale of fixed asset accordingly an in this case you can take RC if you want and have to show that you have purchased that car for your own purpose at market value..
Message likes :
1 times
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
- Capital Gail Exemption Certificate
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Transfer of Physical Stock Between Two Proprietorship Concerns
- MSME disclosure and disallowance
- 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
- 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
