Depreciation & fixed asset accounting

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 April 2015 Hello
My query is,In balance sheet Fixed Assets are shown in historical cost & there is a depreciation fund account & WDV method is followed for depreciation calculation. In case of Block of assets sale amount should be deducted from WDV amount but while showing in balance sheet should we have to deduct cost price from fixed asset & depreciation portion from depreciation fund account?. what is the journal entry?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 April 2015 In the balance sheet cost price has to be deducted from fixed asset and depreciation from depreciation reserve (fund account).
Journal entry is :
Depreciation reserve ac Dr
Profit/loss on sale of asset
To Fixed assest ac Cr

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Querist : Anonymous

Querist : Anonymous (Querist)

17 April 2015 But in case of block of asset how profit/loss on sale of asset will arise?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 April 2015 Block of asset is for income tax purpose only that is separate calculation for working out taxable profit, out side the books of accounts.
In the books of accounts profit or loss on sale of assets has to be accounted.

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