Dear All,
What will be the accounting treatment of loss on sale of fixed asset (Car) in books of Private Limited Company as per Companies Act and Income Tax Act?
Following are the details :
Book Value of Car - Rs. 9,50,000.00
Car Sold at - Rs. 8,00,000.00
Loss on sale - Rs. 1,50,000.00
Awaiting earliest response in the matter.
Thanks,
Best regards,
Shitanshu
Treatment as per companies Act
As it is loss it shud be taken to P&L as usual.
Entry
P&L A/c Dr. 150000
To Loss on sale of Car A/c 150000
Treatment as per Income tax act
If there is no other asset in the Block of asset of which the car is a part , it can be claimed as a business expenditure. If there is any other asset in the car block then only depreciation can be claimed.
Treatment as per companies Act
As it is loss it shud be taken to P&L as usual.
Entry
1) Loss on sale of car Dr 150000
Bank / cash Dr 800000
To car 950000
2) P&L A/c ..Dr. 150000
To Loss on sale of Car A/c 150000
Treatment as per Income tax act
no depreciation will be allowed in the year of sale for the car.
block asset concept...
Entry should be
Loss on sale of car a/c Dr
To Car Account
Where as Car account is under Fixed assets and Loss on sale of Car is an Nominal Expenses which is a P&L A/c head
No depreciation will be taken for the year of sale to any assets.
The entry shuold be as per company act.,
The different of amount as per Income tax to be shown under Deffered tax liabilities or Assets
IF DEPRICIATION RESERVE RS.50000/-THEN WHAT IS TREATMENT ?
loss will be taken into account after the depreciation has been deducted afterthe depreciation deducted then the entry will depend upon the profit/loss
loss on sale of car
P & L A/c. (loss) Dr.
cash A/c. Dr.
To Car A/c.
Hello professional colleagues,
Can any body tell me what is treatment of loss on sale of asset theft and under which section it is to be treated.
Biswanath
09176691115
Hello,
Company has sold car in loss which was purchased in last year, but depreciation was not provided in last year due to loss booked.
Now in current year car has be sold, what will be the accounting treatment and this will effect company trading profit.
Hello,
Company has sold car in loss which was purchased in last year, but depreciation was not provided in last year due to loss booked.
Now in current year car has be sold, what will be the accounting treatment and this will effect company trading profit.
CAclubindia
