Valuation of closing stock
This query is : Resolved
08 August 2011
A manufacturing company produced mediproducts and have finished goods as closing stock. As per Guidance note issued by the ICAI excise duty on finished goods should added for the valuation of such finished goods so what will be the entry for the above accounting so that excise duty get part of the finished goods.
In my view it sholud be
Excise duty on Finished Goods Dr.
To Excise Duty Payable
Next year we reverse above entry and pass normal entry when the above subject goods removed .
If we do this then our FG get valued as per Guidance Notes issued by the ICAI and we follow normal accounting by making entry at the time of removal .
Is i am wrong ?
If then pls suggest what will be correct accounting Treatment.
In my view it sholud be
Excise duty on Finished Goods Dr.
To Excise Duty Payable
Next year we reverse above entry and pass normal entry when the above subject goods removed .
If we do this then our FG get valued as per Guidance Notes issued by the ICAI and we follow normal accounting by making entry at the time of removal .
Is i am wrong ?
If then pls suggest what will be correct accounting Treatment.
08 August 2011
AS-2 can be followed for valuation of closing stock as well as purchase and sales without clubbing excise duty and vat,
However there should be sufficient balance in cenvat credit / PLA to cover the liability on the closing day of year.
However there should be sufficient balance in cenvat credit / PLA to cover the liability on the closing day of year.
09 August 2011
AS-2 may be followed for accounting purpose and section 145A of the IT Act,1961 may be followed ,out of the books, for incometax purpose as per ICAI Guidelines.
However ,excise duty provision on closing stock if booked, section 43B of the said act has to be complied with other wise disallowance is warranted.
However ,excise duty provision on closing stock if booked, section 43B of the said act has to be complied with other wise disallowance is warranted.
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