que.
person has taken the office of which building is under construction and going to use this property either as a invetsment or as a fixed assets..office is of 450000.and he had paid 250000 to get the possesion in march 2010.
Remaining amt he will pay in october november 2010...than by which amt he should show entry in 2009-2010 accounting?
First he has to clarify whether he will used it as fixed asset or ionvestment.
if he wants to book it as fixed asset then book the whole cost and show it as liablity for unpiad amount.
if he wants show it as investment then as per my opinion show at Rs.250000/- in Balance Sheet
I disagree with Mr. Sudhakar... I think you must show entire 450000 as asset and 200000 as liability (in either case). This is because, if you show the net value of 250000, then the user of the balance sheet will never come to know of a cash liability of 200000...
if he wants to book it as fixed asset then book the whole cost and show it as liablity for unpiad amount.
just read the bold words
i also metion the same thing.
but if it is investment how we will show full amount.
I t has to be disclosed for the full value as on 31.3.2010. unpaid can be shown as payable.
HI DEAR,
IF PROPERTY STILL UNDER THE CONSTRUCTION AS ON 31.03.2010, THEN U HAVE TO SHOW IT AS CAPTAL WORK IN PROGRESS.
AFTER CONSTRUCTION COMPLETES, U HAVE EITHER TO CLASSIFY IT AS FIXED ASSET OR INVESTMENT DEPENDS UPON THE PURPOSE FOR WHICH PROPERTY IS PURCHASED. IF U WANT TO USE ASSET AS AN FIXED ASSET, U HAVE TO CAPITALISE WHOLE COST OF RS.450,000 IN FIXED ASSETS AND SHOW RS.2,00,000 AS UNPAID LIABILITY UNDER CURRENT LIABILITY.
REGARDS,
MANOJ
| Originally posted by : Manoj B. Gavali | ||
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HI DEAR, IF PROPERTY STILL UNDER THE CONSTRUCTION AS ON 31.03.2010, THEN U HAVE TO SHOW IT AS CAPTAL WORK IN PROGRESS. AFTER CONSTRUCTION COMPLETES, U HAVE EITHER TO CLASSIFY IT AS FIXED ASSET OR INVESTMENT DEPENDS UPON THE PURPOSE FOR WHICH PROPERTY IS PURCHASED. IF U WANT TO USE ASSET AS AN FIXED ASSET, U HAVE TO CAPITALISE WHOLE COST OF RS.450,000 IN FIXED ASSETS AND SHOW RS.2,00,000 AS UNPAID LIABILITY UNDER CURRENT LIABILITY. REGARDS, MANOJ |
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I ALSO AGREED....
| Originally posted by : Manoj B. Gavali | ||
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HI DEAR, IF PROPERTY STILL UNDER THE CONSTRUCTION AS ON 31.03.2010, THEN U HAVE TO SHOW IT AS CAPTAL WORK IN PROGRESS. AFTER CONSTRUCTION COMPLETES, U HAVE EITHER TO CLASSIFY IT AS FIXED ASSET OR INVESTMENT DEPENDS UPON THE PURPOSE FOR WHICH PROPERTY IS PURCHASED. IF U WANT TO USE ASSET AS AN FIXED ASSET, U HAVE TO CAPITALISE WHOLE COST OF RS.450,000 IN FIXED ASSETS AND SHOW RS.2,00,000 AS UNPAID LIABILITY UNDER CURRENT LIABILITY. REGARDS, MANOJ |
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Agree with manoj.......
On possession and after its completion, 4,50,000 with corresponding unpaid amount as current liability. Otherwise the amount paid on the balance sheet date.
HI DEAR,
IF PROPERTY STILL UNDER THE CONSTRUCTION AS ON 31.03.2010, THEN U HAVE TO SHOW IT AS CAPTAL WORK IN PROGRESS.
AFTER CONSTRUCTION COMPLETES, U HAVE EITHER TO CLASSIFY IT AS FIXED ASSET OR INVESTMENT DEPENDS UPON THE PURPOSE FOR WHICH PROPERTY IS PURCHASED. IF U WANT TO USE ASSET AS AN FIXED ASSET, U HAVE TO CAPITALISE WHOLE COST OF RS.450,000 IN FIXED ASSETS AND SHOW RS.2,00,000 AS UNPAID LIABILITY UNDER CURRENT LIABILITY.
I m agree with above
CAclubindia
