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Accounting of assets imported

Others 433 views 1 replies

MEHER

STUDENT

24 Points Joined February 2012

Hi,

Can someone help me with Accounting of Asssets imported under CIF Contract.

Circumstances:

X ltd., entered an offshore contract with Y Ltd., for import of assets. The title over assets will by transferred by Y Ltd., to X Ltd., through High Sea Sales. Now, the X Ltd., has to clear the goods from Customs Authorities by paying Customs Duty. As per Standard Operating Procedure the company has to account the Assets in books only when the same are received at X Ltd., premises and GRN is raised.

Queries:

1. Can X Ltd., account for the assets without rasing GRN as it is not able to clear goods from customs authorities.

2. If No, then what will be the treatment in books.

Thanks in advance.

Replies (1)

Yogesh Shah

Managing Corporate Finance

1051 Points Joined March 2009

Hi meher.. Pls elaborate following points - - - whether non - preparation of GRN is a problem - or - inability to clear goods from customs is d problem - - - as far as accounting is concerned, the moment risk and rewards of asset are transferred to owner, he can account for it.. GRN is not the hurdle, since it is just a document for internal control - - - but if you are unable to clear it from customs, then defer recognition of asset