fictitious asset

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monia

monia (Querist)

12 October 2009 Hi
what is ficitious asset and examples.

Monia

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)

12 October 2009 Asset created by an accounting entry (and included under assets in the balance sheet) that has no tangible existence or realizable value but represents actual cash expenditure. The purpose of creating a fictitious asset is to account for expenses (such as those incurred in starting a business) that cannot be placed under any normal account heading. Fictitious assets are written off as soon as possible against the firm's earnings.

Message likes : 2 times

CA CHINTAN AJMERA

CA CHINTAN AJMERA (Expert)

12 October 2009 Agree with expert

CA Suresh Choudhary

CA Suresh Choudhary (Expert)

13 October 2009 Agree with expert

ajmal

ajmal (Expert)

13 October 2009 it simply means Assets cannot be seen , but exists in business , which are Goodwill and Patent

Taranjit Singh

Taranjit Singh (Expert)

13 October 2009 These Assets are not assets which are tangible and visible like buildings machinery computer but the expenditure on some activity which is considered as a Capital expenditure instead of Revenue expenditure. When expenditure incurred amount is not debited to Profit and Loss A/C but shown as Fictitious asset and over a period the amount is writtenoff or debited to Pand L account. For example Share issue expenses by a Corporate This is not debited to P& L A/c in the year in which it is incurred but debited in instalments as decided by Management over few years.

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