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Treatment of inherited jewelry in books of accounts

Accounting Entries 2246 views 6 replies

Vinita

CA final (clrd grp 1) CS B.com(hons)

135 Points Posted on 30 November 2016

I have inherited some jewelry from my grandmother in the year 2001 when I was a minor. How should I disclose the same in my Balance sheet and at what valuation??

Replies (6)

HIMANSHU GUPTA

Sr. Accounts Executive

97 Points Posted on 30 November 2016

i think they should be valued at the market value on the date on which they were gifted to you.

Hitesh Khanna

Accounting & Finance Taxation Company

839 Points Posted on 30 November 2016

Basically you received a gift in 2001 so logically your cost of purchase is NIL.

CA VIRAL SANGHVI

Finance head

681 Points Posted on 01 December 2016

Hi,

Please pass the journal entry in following way

Investment account Dr...

To capital account

It is the gift which is exempted u/s 56 (ii) (vi) under income tax Act.

HIMANSHU GUPTA

Sr. Accounts Executive

97 Points Posted on 01 December 2016

@ CA Viral : At what value jewellery will be recognized??

CA VIRAL SANGHVI

Finance head

681 Points Posted on 01 December 2016

with market value of jewellery on the date of gift.

CA Pallav Singhania

IT System Auditor

33683 Points Posted on 01 December 2016

If jewellery is received from the relatives then the jewellery will be valued at the cost of the donor as per section 49 (1). Period of the holding of the previous owner will be added.

However, in Books it should be valued at the Market value.