AS 10

Abhishek Purohit

1) P and l a/c. Dr 2000 Machinery alc Dr 28000 To asset given up 10000 To cash 20000

Thread Starter

Why machinary a/c. 28000 . In. The question only it's mentioned FAir value of asset given up is Rs.8000

Abhishek Purohit

Plus cash consideration

Thread Starter

We have to record the asset acquired at the amount of FV of the asset given up i.e Rs.8000/(as given in the question itself ) then why to add cash consideration ?? In the question it's not said that fair value is 8000 and cash consideration of Rs.20000 .

Abhishek Purohit

Had the machinery was acquired entirely by exchange of another asset ,your point will be valid. However when it is acquired in part exchange of an asset and partly in cash .Asset acquired will be valued at fair value of asset plus cash consideration

Thread Starter

Ohh Okk ok ! Got it now ! Thank u so much