ASSET CONVERSION TO SCRAP

Disposal of assets a/c Dr To Assets A/c (assets transferred to scrap)

HI THANKS IT MEANS, SALE OF SCRAP A/C. DR TO ASSET ACCOUNT.

Originally posted by : rajesh keshri
	Disposal of assets a/c Dr To Assets A/c (assets transferred to scrap)

Is it a Fixed Asset? Assume asset value was 100,000/- ans scrap value is 5000/-

Well.. then the probable entry shall be :-

Loss on revalution Dr.  95000.00

Scraps Dr.                          5000.00

    To Asset A/c                                                            100,000.00

(being transfer of asset to scrap a/s because of dimulsion in value of asset)

agreed with aparna raja

In my opinion, accounting standard 6 plays a role here. As per the accounting standard total historical cost of asset should be charged to P&L a/c during its working life. Here two situations we may face with, 1) AS 6 is adhered: then just transfering an asset to scrap account is enough. 2) AS6 in nt adhered: then it becoms a change of policy which should accounted for as follows. Depreciation a/c dr/ scrap a/c dr/ To asset a/c

In my opinion, accounting standard 6 plays a role here. As per the accounting standard total historical cost of asset should be charged to P&L a/c during its working life. Here two situations we may face with, 1) AS 6 is adhered: then just transfering an asset to scrap account is enough. 2) AS6 in nt adhered: then it becoms a change of policy which should accounted for as follows. Depreciation a/c dr scrap a/c dr To asset a/c