Reimbursement of amount spent on fixed assets

This query is : Resolved

Aravind.. (Querist)
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03 June 2013 Fixed assets purchased on FY11-12 for 2,50,000. Dep. provided for fy11-12 6,750, as per companies act.

During FY 12-13, an amount of 1,00,000 was reimbursed by a third party towards purchase of such fixed asset.

How should this be treated as per companies act? Should the amount reimbursed be reduced from gross block or net block?

TKKKKKK

TKKKKKK (Expert)
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03 June 2013 if you receive any subsidy , u can reduce the block . other wise not.

Ganeshbabu K

Ganeshbabu K (Expert)
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03 June 2013 it can be reduced from the cost of machinery,
(gross block)

and depreciation can be caluculated on decreased value fixed asst over remaining useful life of asset,

an entry

bank a/c dr
to fixed asset can be passed