Ekta Agarwal (Accounts Executive) (42 Points)
04 February 2013What will be the accounting treatment for conversion of land into stock- in-trade ?
How will be the same disclosed in P/L A/C ??
Please everyone ignore capital gain treatment.
Devendra
(Chartered Accountant)
(4775 Points)
Replied 04 February 2013
Following is the Accounting treatment to be done :-
Case 1 - If the land is shown as Investment in the Balance Sheet
Land A/c Dr. ( Grouped under the head purchase in trading account )
To Investment A/c
[ Being Land brought into stock ]
Case 2 - If the land is brought into business by a Partner / Propreitor
Land A/c Dr. ( Grouped under the head purchase in trading account )
To Partner's / Proprietor's Capital A/c
[ Being Land introduced in Business ]
Regards,
Devendra Kulkarni
CAclubindia
