Recording of fixed asset

Save Share

This query is : Resolved

kapil goyal (Querist)
Follow

03 January 2015 Hello experts,

As we know at the time of capitalisation we have to deduct NRV of scrap from the total capitalisation amount and have to book a new asset as a scrap.

so if a company did not consider this point at the time of capitalisation in previous year in whicha capitalisation instrumented.

then in current year when Scrap is disposed and realise, what should be the treatment of receipt from scrap as this is originally should be deducted from capitalised value.

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

03 January 2015 Even Now you can credit the amount of scrap to the asset account. It will give you gain or loss as the case may be.

kapil goyal

kapil goyal (Querist)
Follow

03 January 2015 Amol, then depreciation wrongly charged in previous year will not cured and it will have impact on current year financial also...
Please answer me with reference of any AS or guidance note...

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

03 January 2015 If you are so meticulous, then prepare a schedule which DATEs back from the first year of asset purchase and make the rectification entries through Profit and Loss Adjsutment Account for the all the years. That is better.

kapil goyal

kapil goyal (Querist)
Follow

03 January 2015 But is this allowed for a limited company...
Because this is the previous year matter... .
So what is permissible action allowed in current financials....
And working is no bar for me...
Kindly give me permissible actions and their respective reference too...

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

03 January 2015 These are the permissible actions.

Make a detailed working....(In fact we made such detailed workings in deferred tax asset/liability case...right?)

See, the point is, ERROR has already occurred. Whether permissible or not is not a question now......We need to rectify the same from GOOD GOVERNANCE view point.

The disallowability under income tax shall be dealt by the tax auditor. Provide this working to tax auditor as well.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now