Dear Friends,
One of my clients is facing a strange problem, He incorporated a manufacturing Company in the F/Y 2005-06, in which he incurred certain preoperative expenses, say Rs. 100000/-, (which, by mistake, included a machine valuing Rs. 30,000/-), and the same were subsequently loaded on Buildings and the plant and machinery procured till date of commencement of commercial production. Now after a span of 7 years i.e. in F/y 2013-14, they are selling this particular machine, valuing Rs. 30, 000/- ( being its net value excluding any element of preoperative cost ).
How can we effect this transaction in our books of accounts as well as in depreciation schedule.
Regards,
Krishna Srivastava
CAclubindia
