LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Query on revised schedule vi

NEERAJ KHURANA (ACCOUNTS OFFICER) (48 Points)

13 March 2013

Hello

I would like to know :-

is there any situation when trade receivables are shown under non - current assets in Revised Shedule VI? If yes, what is that situation?

Thanks

Reply
Follow
Share

3 Replies

Manoj jain (Intern) (535 Points)
Replied 13 March 2013

Capital advances are advances given for procurement of fixed assets which are non-current assets. Typically, companies do not expect to realize them in cash. Rather, over the period, these get converted into fixed assets which, by nature, are non-current assets. Hence, capital advances should be treated as non-current assets irrespective of when the fixed assets are expected to be received and should not be classified as Short-Term/Current.

HARIRAM (Chartered Accountant) (55 Points)
Replied 13 March 2013

Receivables are always considered to be trade receivables (Current), however if the receivables are considered to be doubtful, the receivables needs to be examined as to whether should this be categorised under 'Non current assets'. Normal business cycle period is to be examined in this case for ascertaining the due date, if that is not possible then we need to consider 12 months to be the normal period. If the management is confident and proves the justification with evidence that the doubtful debts shall be received within 12 months period, then the amount shall be classified under Current Asset category based on the evaluation of reasonability.

1 Like