CA Karan Lodhi (CA and B.com(hons.)) (879 Points)
29 March 2013Dear All,
Please share your valuable knowledge regarding the following case :
Inventory of some past years from 2005-2012 have become obsolete and now we want to wrte off the said stock from our books.No insurance is taken at all and it will be sent back to US head office.The loss is of abnormal nature.please give me journal entries at the earliest.
CA BHUMIT SHAH
(Consultant )
(270 Points)
Replied 30 March 2013
IF THERE IS ANY REALISABLE VALUE OF STOCK THEN WRITE IT DOWN TO ITS REALISABLE VALUE OTHERWISE DONT INCLUDE SUCH STOCK WHILE TAKING CLOSING STOCK AS ON 31-3.THE LOSS WILL BE AUTOMATICALLY ADJUSTED IF U WILL NOT TAKE SUCH STOCK IN CLOSING STOCK.THUS THERE IS NO ENTRY THUS DONT INCLUDE IT IN CLOSING STOCK
Nitesh Matta
(Nothing)
(198 Points)
Replied 30 March 2013
if there is no realisable value of the stock then i suppose there shoulb be entry for it
Profit and loss a/c ..... dr
To stock a/c (obsolete)
i also want to know about it.. pls experts have a look at this
CA Prateek Garg
(CA in Practice)
(1447 Points)
Replied 30 March 2013
Agree with CA BHUMIT SHAH
at the time of closing of Accounts Value the Stock at NRV as per AS 2 .
it will adjust the Loss Automaticallly
CA Karan Lodhi
(CA and B.com(hons.))
(879 Points)
Replied 31 March 2013
thank you sir for your valuable reply
Yash Kedia
(23 Points)
Replied 17 December 2021
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