To account an omitted asset

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sajan davis (Querist)
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23 August 2010 An asset worth Rs.500000/- had been purchased on 2006, but it was

omitted to record in the Books of accounts.

In the year of 2010, the mgt realized the mistake and accounted the

same @ Rs.500000/- without providing depreciation for the PYs.

whether the asset is recorded at the correct value ?

Please advice...

CA SMR

CA SMR (Expert)
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23 August 2010 As per AS 5,the depreciation has to be applied with retrospective effect starting from 2006 and to be disclosed as prior period item.

Excepts from AS 5
The term ‘prior period items’, as defined in this Statement, refers only to income or expenses which arise in the current period as a result of errors or omissions in the preparation of the financial statements of one or more prior periods. The term does not include other adjustments necessitated by circumstances, which though related to prior periods, are determined in the current period, e.g., arrears payable to workers as a result of revision of wages with retrospective effect during the current period.
The nature and amount of prior period items should be separately disclosed in the statement of profit and loss in a manner that their impact on the current profit or loss can be perceived.

sajan davis

sajan davis (Querist)
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24 August 2010 Thanks lot ...

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