An asset WDV at the end of a year is Re.1. After taking physical count of stock it was noticed that the asset is lost ( not available with the company). In this case what accounting entry needs to be passed to remove the asset from the books of accounts?
Dear Anil,
since the asset has been depreciated to a negligible amount i.e Re1 and thereafter the asset has been lost , probably stolen so in my opinion this is a loss to the company and shall be debited to Profit and loss a/c.
loss of asset, though it is of very nominal amount, should be disclosed in the financial statement at the end of the year
since the amount is not material . it need not be disclosed . it can be written off in the profit and loss account.
Accumulated Dep.....Dr
Loss on sale of assets ....Dr
Fixed Assets .....................Cr
This WDV of the asset may be zero but if the original acquisition cost is significant, disclosure is to be made in the notes too accounts for the loss of the asset.
| Originally posted by : RAKESH | ||
 |
since the amount is not material . it need not be disclosed . it can be written off in the profit and loss account. |
 |
CAclubindia
