Treatment of adavnce on capital account
This query is : Resolved
Anup Sarker
(Querist)
15 January 2011
In a recent interview I replied that advance for fixed assets is shown as capital-work-in-progress but interviewer opined that it is shown under loans and advances and I did not agree. Please comment.
CMA Ramesh Krishnan
(Expert)
15 January 2011
In this case my view is if the asset is self constructed like builing & other construction works & Research & development we can show the advance payments under Capital work in progress
In case asset purchase from outside supplier which is readymade type for that any advance you made that can be treated as loans & advances
In case asset purchase from outside supplier which is readymade type for that any advance you made that can be treated as loans & advances
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O.D.SHARMA
(Expert)
16 January 2011
Advance for fixed asset cannot be in capital WIP its loan.
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