Question

12. Land and Buildings are shown at Rs. 20 Lac in the Balance Sheet of the business owned by M
Ganesh. However, as per the certificate of Govt. approved valuer the realisable value of Lan
and Building is Rs. 200 Lac. Mr. Ganesh wants to show the Land and Building at this value
his books. Can he do so ? Give reason.
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Answer 1

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Answer 2

Land and Buildings are shown at Rs. 20 Lac in the Balance Sheet of the business owned by Mr.Ganesh and his reliable value is 200 lacs.

•Mr ganesh cannot shown land and building at realisable value.

•because of Accounts are maintained on the concept of historical costs (i.e., the initial cost).

• in line with this concept, an asset is recorded within the books of accounts at the value at which it had been acquired.