Can Inventory be transfered Fixed Assets

AS 1018 views 5 replies

SUMIT

A.M.

53 Points Joined April 2009

Hi, We are dealing (Trading) in diagnostic instrument and treat them as our inventory. Now we have transfered some instrument to our employees for testing purpose and they will never be sold. They will either be given back by the employees at the time of resignation or transfered to new employees. Now can we treat these instrument as our fixed assets and chrged depreciation. What is according to AS and what are the necessary entries to be passed.

Many Thanks in advance

Sumit Chaturvedi

9910044270

Replies (5)

praveen

Chartered Accountant

6971 Points Joined September 2007

As ownership will be in the name of the company it self you can transfer it to your fixed assets and claim depreciation.

CA ADITYA SHARMA

CA IN PRACTICE

16719 Points Joined May 2011

Originally posted by : praveen
	As ownership will be in the name of the company it self you can transfer it to your fixed assets and claim depreciation.

yes agreed

rachit jain

chartered accountant

635 Points Joined December 2008

if i assume this testing as some kind of research then it will be treated as expenditure. As per AS 26 ( intangible asset) any exp incurred toward research will be treated as expense.

Rajnikant Vadigoppula

CA CS And CMA Final

919 Points Joined May 2009

yes treat them as fixed asset and charge depreciation

Pratik Nitin Vyas

Employed

354 Points Joined September 2008

sir pls tell me that we have a supremarket so the inventory which is leving in the ware house or in the smkt. we can claim depreication on inventories held for sale to the conusmers. a per the acounting standards - 2& section 145 of the income tax act, 1961. Also i have heard that ITAT jugment is alos there which say that depreication cannot be claim on the inventoreis held for sale to the final consumer's.

si rpls help me out.