Can two seperate concern share one generator with contribution of diesel in production ?
If yes, how we can maintain this in accounts books ?, what is income tax provision or rule regarding this?
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Sharing of machinery
Replies (5)
According to AS 10 "Accounting For Fixed Asset" ,para 15.2 Valuation of Fixed Asset
Where an enterprise owns fixed assets jointly with others (otherwise than as a partner in a firm), the extent of its share in such assets, and the roportion in the original cost, accumulated depreciation and written down value are stated in the balance sheet. Alternatively, the pro rata cost of such jointly owned assets is grouped together with similar fully owned assets. Details of such jointly owned assets are indicated separately in the fixed assets register.
i think it should be based on time....
| Originally posted by : DHRUVA K S | ||
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Now Question is can both of concern do this legal if yes then how concern "B" show his diesel exp. |
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yes: In your case lets assume the consern B does not want the ownership and only the benfit of power by sharing the disel cost.
anlaysing the situtation your contribution towards disel is not capital expenditure so you can charge the expense to P&L under "factory maintainance"
if you are paying any other amount other than fuel charges for the use of generator then that should be under a contract.. and you can not show that amount in your balance sheet. but you can only charge to P&L under factory maintainance
O.K. Thnaks Dhruva Ji
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