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Accounting for Fixed Assets
If a building is taken on rent for business, it is not recognized as an asset. But, what is the accounting treatment of other fixed assets that were already present in that building in the accounting year subsequent to that of starting the business, like furniture, AC etc?
Replies (6)
Firstly you might be clear
You asked the accounting treatment in which aspects?
i.e. 1) Operating lease
2) Financial lease
You asked the accounting treatment in which aspects?
i.e. 1) Operating lease
2) Financial lease
All I have asked is that if a person takes a building on rent, which has assets like AC, Furniture etc., for doing his business, how will he treat those assets (Furniture etc) at the beginning of financial year, next/subsequent to the year of commencement of business, in his books of accounts? There is no question of any type of lease here.
Yes... The Assessee can book the AC, Furnitures & Etc which is purchased by him...
There are two cases become
I) These assets are separable
ii) inseparable
If these assets are separable then the same accounting is done as similar as building
On the other hand, if it is inseparable then no separate accounting treatment is done
1 more thing to know about the lease is important because in case of finance lease (Risk & rewards transfer) we show the asset in a fixed assets
I) These assets are separable
ii) inseparable
If these assets are separable then the same accounting is done as similar as building
On the other hand, if it is inseparable then no separate accounting treatment is done
1 more thing to know about the lease is important because in case of finance lease (Risk & rewards transfer) we show the asset in a fixed assets
Why these confusion here...?
Also no need deep or confused details...
If rented the building with said assets then it's not Assessee's FA & it's also treated rented...
In case the said items purchased by Assessee them it's will be treated as FA in Assessee's books...
Also no need deep or confused details...
If rented the building with said assets then it's not Assessee's FA & it's also treated rented...
In case the said items purchased by Assessee them it's will be treated as FA in Assessee's books...
yes you are right
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