Accounting for seized property
Atharv Sankliya (377 Points)
28 November 2021
accounting for seized property
Atharv Sankliya (377 Points)
28 November 2021
yasaswi gomes
(My grammar is 💯 good I)
(7068 Points)
Replied 28 November 2021
need more info like, did the company loose property or did it seize property of other company
yasaswi gomes
(My grammar is 💯 good I)
(7068 Points)
Replied 28 November 2021
First when they lock the property and company doesnt know why
Suspense a/c
To Asset a/c
when you will know that police will tell you that this property is being used for illegitimate purposes and hence locked up, you will have to go to courts. Chances are that you will win the case to get the property back, you will reverse the suspense account and retain the ownership until judgement is over. But create a legal provision
Asset a/c
To Legal provision a/c
When you loose the case
Legal provision a/c
To asset a/c
this will derecognise the asset. No need to write the loss off in income statement because it does not meet the criteria of disposal or retirements. I have tried to check if impairment will work, the mca website is not working.. but impairment is not applicable as it works only for physical damage.
yasaswi gomes
(My grammar is 💯 good I)
(7068 Points)
Replied 28 November 2021
This above procedure is for when ou create a provision in liabilities. or else contra method
Provision contra asset a/c
To Asset a/c
and when you loose the case
Asset write off a/c-> income statement
To Provision contra asset a/c
I dont understand why people have to write it off in income statement when they can write off from balance sheet. No tax can be claimed. instead, they can make a disclosure
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