Treatment of profit on sale of fixed assets

as per AS 1 all income and expenses is to be recognized on accrual basis. therefor profit on sale of asset is to be recognized on accrual basis.

First of all may i know which is that asset and on the other side the treatment will depend on the nature of asset

Recognition of profit will be at last stage will be given but for the accounting treatment asset name is requisite

Nature of assets is office buiding...

I agree with Rachit view that income/expenses to be recognised on accrual basis.

Revenue is to be recognised in the year the asset is disposed off and only the receipt is deferred.

This is only my view

But if your receipt is not coupled with guarantee then you can defer the recognition of revenue.

This is only my view

HI dear sumit

                          the accounting treatement should be as per AS-10, book the capital nature income ( in p&L as other income) on the date of sales deed with, and if in future amount are non recoverable then you can make the provision.

It Should be charged As revenue as it doesnt add to increase in efficiency of the asset.. moreover it is a charge against future repair expenses which r paid as additional warrenty.. so it should be treated as revenue and routed through P/l

IT SHOULD BE ON ACCRUAL BASIS

IT SHOULD BE TREATED AS PER AS 9 TIME OF RECOGONISATION OF REVENUEIS WHEN CERTAINITY ESTABLISHES  IF AT THE TIME OF SALE THEN OTHERWISE AT THE TIME OF RECEIPT OF INCOME

IF the rights have been transferred ..

and there are no doubts on receiving the amt due ...

then it can be treated as accd to AS 1 on accrual basis.

Otherwise it will be treated on receipts basis only.

thanks a lot

RECOGNISED ON ACCRUAL BASIS AS PER AS-1 SINCE OWNERSHIP N ALL RISKS N REWARDS HAVE BEEN TRNSFRD.

WILL BE ROUTED THRU P/L ACCOUNT (I.E. REVENUE NATURE) AS PER AS-10.

It should be on accrual basis and the income should be recognised at the point of time when sale is completed and the risk and ownership of the asset is transferred.

Hi,

Yes whole profits to be booked in first month itself irrespective of recipts. Its on accural basis.

Thanks

Harpreet