if government acquired a land (other than agricultural land and ancestral property acquired prior to 2001) under compulsory acquisition on 2012 and instead of amount, given developed site as compensation in the fy 2019-20.
1) can compulsory acquisition treated as sale of property?
2) which one to consider for cost of acquisition whether it's NIL or market value of 2001 (if we don't know the value of acquisition value) for calculation of capital gain
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Capital gain on compulsory acquisition of capital asset
Replies (8)
If your working for the government, I think the accounting could be different, if you are related tor the seller, follow revenue recognition.
1. Yes, compulsory acquisition is considered as transfer of property and taxability arises in the year of receipt of compensation.
2. You have to consider higher of cost of purchase or market value on 1.4.2001.
2. You have to consider higher of cost of purchase or market value on 1.4.2001.
That is great,is this AS using investment standard, thought it was IndAS
CA Rashmi did you mean lower of carrying amount and fvlcd from the sellers perspective and recognise revenue if land is nventory for real estate firm?
I m unable to understand what you want to say...
@ CA Rashmi
measurement for disposals/ Held for sale is ‘lower of carrying amount and fvlcd’ and is it not the same in AS? If you can kindly guide me to find which standard deals with higher of cost or market value, I’d like to go through it. I knew this measurement for purchases applicability in IFRS as well. ( I mean remember reading it once on a website when I typed purchases+IFRS, when I checked recently, it is not there now)
Thank you
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