What are the accounting entries to write down property stock to its nrv. This relates to a reduction of £6m in the valuation of property stock for a property developing limited company.
thanks
Replies (1)
Please login or register to join the discussion.
Write down of Land bank accounting entries
On the understanding that the land bank is recorded at a cost in excess of £6m, the the accounting entry is:
Cr Stock (B/S) £6.0m
Dr Impairment loss (P/l) £6.0m
Being write down of land bank to net realisable value.
The effect of this is to reduce the carrying value of the asset by £6.0m and recognises the loss of value in the profit and loss account as an expense.
Hope this helps...