inventory of a company is seized by goverment and the company does not have any control over the inventory so what will be the accounting treatment for this ?
Menu
Inventory seized by goverment
Replies (4)
You have to create a provsionbased on the outcome to recover the goods. If you can recover the goods through courts, if it is more than 50% chance that you will win create a provision. Based on this, check out contingent liability criteria and recognise accordingly
Under which act
Provisions standard. I did not find any Google search related Provisions+companies acts 2013. They are naming all rules as provisions.
To think of, a provision is a liability. We create a contra asset for provision for receivables. The same way we can create it for inventory as well
Dr. Inventory provision asset
Cr. Goods in transit
This is a contra asset provision. I tried to push it into liabilities and it cannot be done into liabilities. Any better ideas?
Sorry forgot it was an asset previously.
Recent Threads
- Can I claim benefit under 54F if I sell my equity
- Income tax refund 25/26
- Who is responcible to pay GST Liability (If Servi
- Excess Payment on RCM
- AOC4 auto population of previous year data
- Exports against INR PO payable by Domestic Company
- Which websites are best for government exam prepar
- TDS on maturity payment of LIC of india
- ITR2 Gold ETF short and long term
- Query under faceless assessment
Related Threads
CAclubindia
