Fixed assets destroyed

I think it will be treated as loss on machinery and is required to be written off in profit & loss A/c, Entries will be as follows:-

1. Loss on destroyed machinery A/c ................Dr.

               To Machinery A/c

2. Profit & loss A/c ..................Dr.

                To Loss on destroyed machinery A/c

Regards,

Pinky Agarwal..

The company does not come under tax audit, but at the time of preparing notes to accounts by a CA, does the company need to provide some sort of proof of the machinery being destroyed?

The CA may conduct physical inspection of the destroyed plant & machinery or the co. may take a valuation certificate from a chartered engineer or a valuer as to the p&m is completely destroyed & it cannot be further put to use. Also unless it affects the going concern concept of co. i don't think there is a need for reporting by the auditor or in the notes on accounts.......

Also Mihir all Comapnies are liable for tax audit !!!!!!!!!

Thanks Pinky & Suraj,