Notes to accounts
This query is : Resolved
16 June 2013
Dear Fellow Members,
Please advise me in following scenario- XYZ is a public listed company. Local government has taken 10% of its land due to the local government's road extension project without giving any compensation.
The company follows cost model for its fixed assets. And now the question is simply passing an entry of derecognising the proportionate amount of land assuming a disposal of assets while charging profit is must or there are any other way out is here?
Please note standards for impairment is not applicable here due to carrying amount is much lower than the fair market value.
Laba Khatri
Member
Please advise me in following scenario- XYZ is a public listed company. Local government has taken 10% of its land due to the local government's road extension project without giving any compensation.
The company follows cost model for its fixed assets. And now the question is simply passing an entry of derecognising the proportionate amount of land assuming a disposal of assets while charging profit is must or there are any other way out is here?
Please note standards for impairment is not applicable here due to carrying amount is much lower than the fair market value.
Laba Khatri
Member
17 June 2013
Dear Laba,
As per AS 10 Accounting for Fixed Assets, Fixed assets means an an asset held with the intention of being used for the purpose of
producing or providing goods or services and is not held for sale in the normal course of
business.
Here in your case that 10% portion is not satisfying the basic thing Asset definition hence the same should de-recognized in books of accounts and transfer to Profit & loss account
As per AS 10 Accounting for Fixed Assets, Fixed assets means an an asset held with the intention of being used for the purpose of
producing or providing goods or services and is not held for sale in the normal course of
business.
Here in your case that 10% portion is not satisfying the basic thing Asset definition hence the same should de-recognized in books of accounts and transfer to Profit & loss account
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- ITDS U/S.194T of Firm
- Difference between Date of Payment and Date of Deduction?
- Unregistered suppliers utility
- Non-Compliance documents have not been submitted by the contractors debited
- EXPORT COMMERCIAL INVOICE HSN CODE
- FORM 141 SDV query
- Same demand raised for original as well as rectification request return
- Sale of property held jointly with a non resident Indian
- GST not cancelled by tenant
- The TDS balance for March 26 shows a mismatch between the books and the portal; what should be done
- Filling ITR - U
- Form 140 tds
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
