How to show asset in the books??, Accounting - Auditing

[kavish rizvi]

Dear Sir,

One of the vendor of my companies has offered us to give a machine (FA) to use till we purchase the material from them.

When we will stop purchasing the material from them then they will take back the machine. So, my query is whether we have to show the Asset in the books..?? If yes, then how.??

Awaiting for your precious comments

Posts / Replies

[CA GOPALJI AGRAWAL]

We have to look up the detailed terms and conditions of the contract. Proma-facie, it meets out the definition of the asset but you have to ascertain the value against the same to account for the same.