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Treatment of Car written off

22 May 2019

If a car value is reduced from balance sheet and the car is used for personal purpose then what wiĺ be the treatment when preparing computation of income?

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5 Replies

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 22 May 2019

if the block ceases to exists then you need to assess the stcg/stcl.
if not then just show as a deletion from the block

SUMIT GOYAL (43 Points)
Replied 22 May 2019

is the written off value to be charged to capital account or just to be reduced from balance sheet?

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 22 May 2019

just reduce from BS and transfer to capital account

SUMIT GOYAL (43 Points)
Replied 22 May 2019

transfer to capital account? didnt get plz explain

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 22 May 2019

since you are selling but using the car for personal use, so while calculating profit/loss transfer the wdv of the car to capital account and by finding the market value if the car transfer the profit loss to Pand l as below

Capital Dr
to P&l
to Car

capital. Dr
p&l Dr
to car