Treatment on profit on sale of Fixed Assets ...Urgent Sir!!
This query is : Resolved
28 September 2010
Respected Experts,
I have a doubt on treatment of profit on sale of Fixed Asset. There is a block of asset which consists of 10 assets. One asset in that block has been sold at a profit. As per Income tax act the profit cannot be charged to p&l account until the whole block of asset w.d.v. becomes zero. In my case also the whole block of asset doesnt come to zero, therefore i have to credit the profit on sale of fixed asset to that block. I want to know how i can bifurcate the profit amount to other 9 assets which are existing. Is it based on the opening w.d.v. balance of the individual assets or if there is any addition done during the year even that has to be added with the opening w.d.v. Pls. clarify me. Thanks for helping me. With regards, Rajesh.
I have a doubt on treatment of profit on sale of Fixed Asset. There is a block of asset which consists of 10 assets. One asset in that block has been sold at a profit. As per Income tax act the profit cannot be charged to p&l account until the whole block of asset w.d.v. becomes zero. In my case also the whole block of asset doesnt come to zero, therefore i have to credit the profit on sale of fixed asset to that block. I want to know how i can bifurcate the profit amount to other 9 assets which are existing. Is it based on the opening w.d.v. balance of the individual assets or if there is any addition done during the year even that has to be added with the opening w.d.v. Pls. clarify me. Thanks for helping me. With regards, Rajesh.
28 September 2010
No need to bifurcate the profit. As the block is in existence so please deduct sale amount from the block. for calculation of depreciation you need the bifurcation.
28 September 2010
Why you want to bifurcate the profit.
Simply deduct the sale proceeds from the value of the block of asset.
Simply deduct the sale proceeds from the value of the block of asset.
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