29 August 2010
if i sale car on loss than what will effect on p& l and how to apply depreciation on asset. Exp. Car Opening Balance 185000 and I sale at Rs75000 . Problem 1. loss on car would be charged from P&L.(Y/N) 2. Depreciation Charge on loss of asset or opening balance of asset.
29 August 2010
If you are selling your car at a loss : If it is used for your personal purpose then it would be treated as a personal effect and the loss arising from sale of car would not form the part of your capital loss.
If your car cannot be treated as persobal effect and not used for the purpose of business then the loss would be treated as capital loss.
If depreciation had been charged on in the earlier year or years then the loss would be treated as a short term capital loss and no deprecition is allowed in the year of sale BUT if you purchase another car in the year of sale for the business purpose then the loss will be reduced from the cost of the new car to form the new WDV.
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