Indian subsidiary company bought an asset worth Rs.3 crore from foreign parent company, which would be used as for demo(Sample) purpose. on the condition that, the said asset would be resold to the parent company after 3 years at the same amount i.e. Rs.3 Crore.
What should be the treatment for the said asset. Whether the same should be treated as;
Fixed Asset or Inventories or Current Asset.
The same cannot be treated as an Fixed Asset, as it is not being held for generation of income by using that particular fixed asset. It is held only for demo purpose & should be disclosed under the head current Assets as ‘Assets held for Sample’
Shyam S Gupta and Company
New Delhi
CA Inter
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M N Rao & Associates LLP
Vijayawada
CA Inter
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Varma Raja & Associates
Thrissur
CA Inter
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S.B.G. & CO. CHARTERED ACCOUNTANTS
New Delhi
CA Inter
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CCI
Pro
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