sale of fixed asset proft/loss treatment in books
This query is : Resolved
srinivas Ganesh Shet
(Querist)
12 August 2010
pls let me know how to treat profit/loss on sale of an asset under WDA method and how to charge depreiciation during that year
CMA Ramesh Krishnan
(Expert)
12 August 2010
Profit/loss on sale of asset need to charge it in p&l account to the extent of depreciation removed. depreciation need to calculate based on number of days used
CMA Ramesh Krishnan
(Expert)
12 August 2010
Profit/loss on sale of asset need to charge it in p&l account to the extent of depreciation removed. depreciation need to calculate based on number of days used
12 August 2010
Agreed with CMA Ramesh.
First charge the depreciation according to the applicable rate of depreciation for the
Days Used/365
in the books and then transfer it to Profit and Loss Account.
Now the Sale Value Less Book w.d.v. of Asset would be either profit or loss on Sale of Fixed Assets.
Whatever is the balance is to be transferred to Profit & Loss A/c.
First charge the depreciation according to the applicable rate of depreciation for the
Days Used/365
in the books and then transfer it to Profit and Loss Account.
Now the Sale Value Less Book w.d.v. of Asset would be either profit or loss on Sale of Fixed Assets.
Whatever is the balance is to be transferred to Profit & Loss A/c.
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