Hire purchase

This query is : Open

Divyesh Gohel (Querist)
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28 August 2013 Announcement: Exclusion of Hire
Purchase
Trading Account (Debtors) Method and
Stock and Debtors Method from Chapter
11
of Intermediate (IPC) Course Paper 1: Accounting Study Material. -
(23-08-2013)
It has been observed that Hire Purchase
Trading Account (Debtors) method and
Stock
and Debtors method of ascertaining profit or
loss on sale of goods of small value
under hire
purchase system based on the simplified
approach followed in the Study Material
are not fully compliant with AS 19 Leases
since
loading amount contains both profit as
well as
interest element.
However, students may note that both these
methods would be fully compliant with
AS 19,
provided the usage of interest rate, IRR,
etc.
are followed to bifurcate the element of interest and profit. Such an approach to
apply
both these methods involves more
complication and hence may not be
relevant in
practice for Intermediate (IPC) Students. Therefore, Board of Studies has decided
to
exclude the Hire Purchase Trading
Account
(Debtors) Method and Stock and Debtors
Method in the Paper 1: Accounting Study Material at Intermediate (IPC) level.
Accordingly, students of Intermediate
(IPC)
Course Paper 1: Accounting are advised
not to
read the said methods given in Chapter 11 of
the Study Material. The details of the
relevant
page nos. and questions in the Study
Material
and Practice Manual of July, 2013(Revised edition) respectively, are given
hereunder:
Volume I Study Material Para 9 to 13 and
Illustrations 13 to 19 in Page
nos. 11.32 to 11.50
Volume II Practice Manual Questions 1, 2, 4, 5, 6, 7, 8 and 10 in Page
nos. 11.1 to 11.20

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