Our firm is conducting Fixed assets Physical verification in one manufacturing company (XYZ Ltd). During verification, we find many Fixed assets which are not accounted in books but which should have been accounted in previous years only. There are 2 reasons for this. 1) Some assets are constructed within company in previous years, like stores material steel and small spare parts issued and charged to consumable but ultimate fixed asset not accounted in earlier years. What should be treatment. Asset came in existene many years back like 6-7 years. 2) Earlier, xyz ltd sold some fixed assets to ABC Ltd in a deal 10 years ago. That time that ABC Ltd forgot some assets in XYZ Plant location only. Now these assets are property of XYZ Limited only. We would like to know what should be done for these assets found in physical verification but not accounted in books
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Fixed assets - physical verification and accounting
Replies (1)
FOR SELF CONSTRUCTED ASSETS U NESSD TO VALUE THAT SSETS AT COST INCURRED IN MAKING THAT EXPENSE.
HOWEVER IF AMOUNT IS SMALL DEPENDING UPON ORGANISATION U MAY CHARGE IT DIRECTLY TO P/L. THIS ESTIMATION WILL BE BASED UPON INDIVISUAL ANALYSIS.
AND FOR SOME ASSETS SOLD EARLIER 10YEARS BACK WHICH WAS NOT TAKEN BY THE BUYER, DONT SHOW IT AS ITS FAIR VALUE MUST BE TO MINUTE FOR THECOMPANY, SINCE 10 YEAR IS GUGE TIME FOR FIXED ASSETS TO DEPRECIATE.
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