Broker Commission Rebate to Reduce PPE Cost—Not Recorded as Income | Ind AS
- Blog|News|Account & Audit|
- < 1 minute
- By Taxmann
- |
- Last Updated on 30 April, 2025
Latest from Taxmann
Under accounting rules for property, plant, and equipment (PPE), especially as per Ind AS 16, companies must include all costs directly related to bringing an asset to its working condition. This includes the purchase price, any related taxes or duties, and costs needed to get the asset ready for use. Importantly, if any discounts or rebates are received during the purchase, they must be subtracted from the asset’s cost, even if those rebates come indirectly.
In this case, a company wanted to buy a machine but wasn’t satisfied with the supplier’s quoted price. While the supplier didn’t reduce the price, the broker involved in the deal decided to share part of his commission with the buyer after the machine was delivered. This raises a key question: Should the money received from the broker reduce the cost of the machine, or should it be treated as income in the company’s profit and loss account?
Click Here To Read The Full Story
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
CA | CS | CMA
