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Recovery from debtor
Accountancy
A company have a debtor of rs 1 crore and the debtor is unable to pay the debt so he give his machinery to company to realise debt so under which head the company record this machinery??
Answers (16)
sushma verma
Asset side of the balance sheet. Because debt will be reduced and asset(machine)will be debited. Machine.....Dr. To debt.
Under which head PPE investment cash and cash equivalents other current assets other non current assets ?
Thread Starter
Atharv SankliyaUnder which head PPE investment cash and cash equivalents other current assets other non current assets ?
Machinery is fixed asset so it will come under PPE(Non current asset)
sushma verma
Machinery is fixed asset so it will come under PPE(Non current asset)
But this machinery is not used in business operations at all it is just held for sale to realise the money
Thread Starter
Atharv SankliyaBut this machinery is not used in business operations at all it is just held for sale to realise the money
Still it is a non current asset. It has value. It may be used in business. It's just that instead of cash, payment has been made in the form of machinery.
Thread Starter
Atharv SankliyaBut this asset is not qualifying the defination of PPE
Why is it not qualifying? Can you share a specific example?
CA Suraj Lakhotia Admin
Why is it not qualifying? Can you share a specific example?
If a asset is not used in a business in any sense does it qualify to be an PPE ??
CA Suraj Lakhotia Admin
then what is it used for?
The company take this asset from its INSOLVENT debtor who is unable to repay the debt in cash , the company want to realise money by selling this asset so my query under which head of asset it is recorded till it is not sold ?
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