Fixed assets

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 July 2011 Hello friends, i m doing audit of a car dealer company in which they are purchasing car from the mfg and among those cars they are purchasing some car for test drive purpose. They capitalise those assets which is right but the issue is date of capitalisation....
For Exp they pur car on 1.10.2010 at that time management has not decided to use it for test drive, after magt decision in the month of jan11 they reg the car in thier name and use it for test drive. In this case tell me the date of capitalisation whether it is 1.10.2010 or 1.1.2011

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 July 2011 Seems this is a case of converting stock in trade to capital asset. If so, the date of capitalization is 1/1/2011 in the cited example.

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