Business purchase account

Mayur Patil (Article)     25 November 2018

It's credited in the books of vendor(seller) a/c because you've to necessarily prepare realisation a/c and all the asset (including fictitious asset) and all the liability you've to transfer realisation a/c

So in the books of vendor following entry you've to pass

Realisation a/c dr
To FA(inc. intangible / fictitious asset)
To CA

After making realisation a/c if there any surplus or deficit should be transfer equity share holders a/c its considered as loss or profit for share holders.

Vishesh Surana   25 November 2018

Because it is for addition in value of what we have received as per SC judgement in the case of Smiff Securities Ltd