Accounting of asset

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10 Points Posted on 11 December 2020
Mr A purchased a asset but payment done by third party can we account it as asset in our books
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On 11 December 2020 at 18:15 Report
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This discussion clarifies how to account for an asset when a third party has made the payment. Generally, you can record the asset if your business benefits economically and the asset's cost is measurable. Crucially, the tax invoice must be in your name and business address. If the invoice is in the third party's name, they will need to re-issue it in your name to avoid potential audit issues and GST complications. Journal entries are provided for both booking the asset and settling the payment with the third party.

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Student
82 Points Posted on 11 December 2020
Yes you must account if you are able to derive economic benefit out of it and how much third part pays for that asser can be measured.
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On 11 December 2020 at 18:41
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3924 Points Posted on 11 December 2020
Also if Tax Invoice is in the name along with business address of Mr A , then A can account asset in the books of A even if payment is made by third party . it's libility of A to pay back to Third party .
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On 11 December 2020 at 19:44
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Accountant
3662 Points Posted on 11 December 2020
Yes, you can

When book asset

Asset A/c Dr.
To Third Party A/c

when payment to third party

Third party A/c Dr.
To Bank
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On 11 December 2020 at 22:18
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118 Points Posted on 12 December 2020
In all this answer, it is possible if the invoice is in name of Mr. A
but if it in name of third party, then ask the third party to raise invoice in name of mr. A with all taxes
as this may be raised in audit with reference to related party a/c
and also Gst rule issue.
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On 12 December 2020 at 10:55
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9 Points Posted on 13 December 2020

Yes Of invoice is made in the name of A and if invoice is made in the name of third party then you cant directly for that third party permission required so show that transactions in third party books also

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On 13 December 2020 at 00:07
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Accountant
3662 Points Posted on 13 December 2020
Please ignore my previous reply

When book asset

Assets A/c Dr.
To Party A/c

when payment made by third party

Party A/c Dr.
To Third Party A/c

When payment made to third party
Third party A/c Dr.
To Bank
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On 13 December 2020 at 00:51

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