What is the treatment (accounting and tax) for discount received on payment towards fixed assets?
If it has to be reduced from the value of fixed assets, what should be done -
1. if the WDV of the assets is less than the amount of discount?
2. If the asset is sold before disount is received?
If the above(2) is to be reduced from the block of assets what should be done if it is already NIL?
You have to give the effect retrospectively i.e. from 1st year of purchase of fixed asset.
your first ques is seem to be wrong one as it is not pract. that discount have such a big amount that will equal to the sale value of the assets. in regard of u 2nd ques. that will be treated as income of year in which it was actually rec.
CAclubindia
