Dear Sir,
What will be treatment of Prepaid Road Tax on sale of office car? As we know Roar Tax is paid once in 5 years. In the 1st year Roar Tax was capitalized. In 2021 we paid the roar tax for another 5 years. So in 2021 booked for Road tax for 1 year and Prepaid Roar Tax for balance 4 years. Now the company has decided to sale the Car in 2022. So, what will be treatment for Prepaid Road Tax on sale of Car.
Thanks
Capitalize it with the cost of car..
Its true. You can capitalise the tax because only finance costs and tax is excluded from FVLCS. This is becauze every disposal is measured lower of carrying amount and fairvalue less costs to sell
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