Exclusion of Hire Purchase Trading Account Method and Stock and Debtors Method from IPCC..

Announcement: Exclusion of Hire Purchase Trading Account (Debtors) Method and Stock and Debtors Method from Chapter 11 of Intermediate (IPC) Course Paper 1: Accounting Study Material. - (23-08-2013)

It has been observed that Hire Purchase Trading Account (Debtors) method and Stock and Debtors method of ascertaining profit or loss on sale of goods of small value under hire purchase system based on the simplified approach followed in the Study Material are not fully compliant with AS 19 “Leases” since loading amount contains both profit as well as interest element. 

However, students may note that both these methods would be fully compliant with AS 19, provided the usage of interest rate, IRR, etc. are followed to bifurcate the element of interest and profit. Such an approach to apply both these methods involves more complication and hence may not be relevant in practice for Intermediate (IPC) Students. Therefore, Board of Studies has decided to exclude the Hire Purchase Trading Account (Debtors) Method and Stock and Debtors Method in the Paper 1: Accounting Study Material at Intermediate (IPC) level. 

Accordingly, students of Intermediate (IPC) Course Paper 1: Accounting are advised not to read the said methods given in Chapter 11 of the Study Material. The details of the relevant page nos. and questions in the Study Material and Practice Manual of July, 2013(Revised edition) respectively, are given hereunder: 

Volume I Study Material Para 9 to 13 and Illustrations 13 to 19 in Page nos. 11.32 to 11.50

Volume II Practice Manual Questions 1, 2, 4, 5, 6, 7, 8 and 10 in Page nos. 11.1 to 11.20

Source : http://www.icai.org/new_post.html?post_id=9838&c_id=342