Celebrate Freedom with 20% OFF on CAclubindia Pro Subscription. Use Code: FREEDOM20

Clarification on Fixed Assets

AS 750 views 3 replies

Shankar G

Assistant Manger Finance

94 Points Joined March 2010

Hi -

We have purchased an assets worth Rs.200Lacs in Dec 2008, and we have provided the Depreciaiton Year on Year, After two years, due to technical fault, assets got damaged partially. Vendor also accepted to issue a credit for Rs.25lacs for his mistake. I would like to know ,how should i treat the credit note in my books of account? whether i need to deduct from my asset value, if so, should I reverse the depreciation as well? else should I charge into other income?

Could you pls share the case study, if you have?

Thanks & Regards,

Shankar G

Replies (3)

V P Narasimhan

Accounts Manager

793 Points Joined November 2008

Kindly check up whether re-valuvation of assets can be done or so..

Shriram Ramachandran

IPCC Student CWA Inter & Processing off

492 Points Joined October 2010

Dear Sir,

U should deduct the cerdit note from the asset value only & depriciation need not to be revised & u can provide the deprication after the deduction of credit note in the current year........

Thanks If am wrong Plz correct me

R Shriram