Can a Depreciable capital asset which is used for the purpose of business can be converted into stock in trade?
if yes then how it is calculated?
thanks in advance.
Nazia
(Asst Manager - Finance)
(139 Points)
Replied 01 April 2013
Yes. depreciable asset can be converted into stock, u have to consider the market value at which it should be transferred to stock.
As per IT act : Such amount shall be reduced from the block of assets ( same procedure as if it were sale of fixed asset).
For accounting : Difference between conversion value and wdv is treated as loss or gain on sale of asset
CAclubindia
