Production banned by government
This query is : Resolved
29 December 2012
Sir,
I am a pharma manufacturer. Suddenly without intimation Central Govt.Banned one product in March 2011 .At that time i am having about 20 lac Mat(Work in progress) 15Lac(Finished) and 15 Lac (Raw).My query is ::-
(1)How the such situation (stocks) reflect in P & Loss a/c for the year 2011-12.
I am a pharma manufacturer. Suddenly without intimation Central Govt.Banned one product in March 2011 .At that time i am having about 20 lac Mat(Work in progress) 15Lac(Finished) and 15 Lac (Raw).My query is ::-
(1)How the such situation (stocks) reflect in P & Loss a/c for the year 2011-12.
29 December 2012
Accounting policy being followed for the valuation of inventory plays a great role here. If valuation of respective inventory items has regularly being done on the basis of Cost or Net Realisable whichever is lower, accordingly, you may state the net realisable value of banned items as NIL.
However, if the inventory items were being shown at Cost, then cost of the inventory item has to be shown.
.
However, if the inventory items were being shown at Cost, then cost of the inventory item has to be shown.
.
29 December 2012
SIR,
THANK YOU VERY MUCH.I WILL do accordingly.
regards
Suresh Jain
THANK YOU VERY MUCH.I WILL do accordingly.
regards
Suresh Jain
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