disposal of Fixed assets

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vijay

vijay (Querist)
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13 April 2010 fixed assets held for disposal are to be shown under which head? plz specify it

CA Ashok Kumar Sahu

CA Ashok Kumar Sahu (Expert)
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13 April 2010 as per my opinion it's part of stock in trade(closing stock)

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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13 April 2010 IN MY OPINION TILL FIXED ASSET IS DISPOSED IT SHOULD REMAIN A PART OF YOUR FIXED ASSETS.

CA Shiv

CA Shiv (Expert)
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13 April 2010 Well i think it cannot be a part of stock in trade as its not a stock* raw material, FG or wip of the company. Also it is not a part of current assets. You can show it in fixed assets only and do not charge depreciation. In a separate block of assets you can include it.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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13 April 2010 WHY NOT CHARGE DEPRECIATION TILL IT IS DISPOSED OFF. PLEASE THINK FROM THE ASSESSEE'S POINT OF VIEW.

CA Shiv

CA Shiv (Expert)
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13 April 2010 Ya you can charge it. but if you specially mentioning it in block of assets held for sale than you cannot charge dereciation. its not used by the assesee.. SO for that you have to treat as a regular asset....

shakuntala chhangani

shakuntala chhangani (Expert)
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14 April 2010 It will remain under the head fixed assets only. however, it will be valued at lower of WDV or NRV and the Loss, if any, will be charged to P/L A/c as required by AS 10. It can never be shown as stock as stock means the goods in which a company deals. Further, the valuation criteria remains the same until that fixed asset is sold out. there is no question of dep. due to valuation mentioned above in ACCOUNTS AS WHEN IT IS HELD FOR SALE, IT LOSES THE CHARACTERISTIC OF BEING A FIXED ASSET.
Entry for removal will be passed only when it is actually sold out.
In case u have any further doubt, revert back to me.
Regards, CA Shakuntala Chhangani

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