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AS-5

AS 925 views 7 replies

whether profit or loss from sale of assets is extra ordinary item under AS-5 or not.

Thanks

Replies (7)

Yes,  It is an extra ordinary item

but AS-5 issued by iCAI contains an example which include sale of assets under ordinary activity. i think this would be consider as incidental activity to furtherance of business .you may also check this in M.P.Vijay kumar book of AS

Thanks

Yes Exactly.  A Sale activity undertaken is incidental and therefore comes under Ordinary Activities. 

Profit or loss from sale of asset is not an extra-ordinary activity. Sale of asset is an incidental activity. It is true that this is not extra-ordinary item but still the disclosure regarding the profit/ loss on sale of assets is required in accordance with Para 12 of AS-15, which reads as under:

 

 

"When items of income and expense within profit or loss from

ordinary activities are of such size, nature or incidence that their

disclosure is relevant to explain the performance of the enterprise for

the period, the nature and amount of such items should be disclosed

separately."

Profit or loss on sale of asset is comes under ordinary activity

Apportionment of asset is an extra ordinary item

Sorry for saying it wrong in my first post 

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its not an extra ordinary item


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