 |
|
Landed Cost of Imported Spare Parts – Calculation and Accounting Treatment |
Landed Cost of Imported Spare Parts | Accounting Treatment:
For the purpose of Landed cost of Spare parts, we must accumulation into the head of -Transit S/P LC-Transit S/P LC-29672410050 following cost items includes-
1. LC Charge & Commission:
2. Add Confirmation Commission charge by bank
3. 2nd QTR Commission:
4. LC indemnity charges by bank
5. PAD created by bank:
6. C & F bill Charged by C & F Agent
7. Premium Insurance paid
Let’s start with practical Accounting treatment: (Learning purpose only) including imaginary figure use
Part-Transit S/P LC-Transit S/P LC-29672410050
(Step-01):LC Charge & Commission:
When Bank deducted Amount as LC Charge & commission from our CD#A/C-2850
Then we pass Bank Payment Voucher.
Voucher No. 01
Voucher Date: 09-07-2024 Bank Payment Voucher
|
Ledger Name |
Debit (TK) |
Credit (TK) |
Remarks |
|
Transit S/P LC-29672410050 |
9,462.00 |
|
|
|
ABC Bank Ltd. CD-2850 |
|
9,462.00 |
|
Narration:
LC Issue Commission Deducted EURO 70.8028 @ Tk.133.6386 for LC No.10050.,
(Step-02): Add Confirmation Commission charge by bank:
Then we pass Bank Payment Voucher.
Voucher No. 01
Voucher Date: 24-12-2025 Bank Payment Voucher
|
Ledger Name |
Debit (TK) |
Credit (TK) |
Remarks |
|
Transit S/P LC-29672410050 |
5,462.00 |
|
|
|
ABC Bank Ltd. CD-2850 |
|
5,462.00 |
|
Narration:
Add Confirmation Commission against. LC.10050 EURO 20,435.1 @ Tk.133.6386
(Step-03): 2nd QTR Commission:
Then we pass Bank Payment Voucher.
Voucher No. 01
Voucher Date: 24-12-2025 Bank Payment Voucher
|
Ledger Name |
Debit (TK) |
Credit (TK) |
Remarks |
|
Transit S/P LC-29672410050 |
5,096.00 |
|
|
|
ABC Bank Ltd. CD-2850 |
|
5,096.00 |
|
Narration:
2nd QTR Commission on LC Amendment dt.25.07.24 for LC No.296724010050
(Step-04): LC indemnity charges by bank:
Then we pass Bank Payment Voucher.
Voucher No. 01
Voucher Date: 10-09-2024 Bank Payment Voucher
|
Ledger Name |
Debit (TK) |
Credit (TK) |
Remarks |
|
Transit S/P LC-29672410050 |
1150 |
|
|
|
ABC Bank Ltd. CD-2850 |
|
1150 |
|
Narration:
LC indemnity charges deduction for LC No.296724010050 Bank dt.10.09.24. ,
(Step-05): PAD (payment Against document) created by bank:
Then we pass Bank Payment Voucher.
Voucher No. 01
Voucher Date: 17-09-2024 Journal Voucher
|
Ledger Name |
Debit (TK) |
Credit (TK) |
Remarks |
|
Transit S/P LC-29672410050 |
2,695,361.27 |
|
|
|
PAD-325-000435050,SP-LC-10050 |
|
2,695,361.27 |
|
Narration:
Pad Creation Against S/P LC -29-10050 dt.17.09.2024,
(Step-06): Purchase spare parts:
Then we pass Purchase Voucher.
Voucher No. 01
Voucher Date: 19-11-2024 Purchase Voucher
|
Ledger Name |
Debit (TK) |
Credit (TK) |
Remarks |
|
Spare parts Items name(+++++++) |
29,11,706.27 |
|
|
|
Transit S/P LC-29672410050 |
|
29,11,706.27 |
|
Narration:
Amount payable to XYZ against purchase of Spare parts. date.19.11.2024
(Step-07): Premium Insurance paid by bank:
Then we pass Bank Payment Voucher.
Voucher No. 01
Voucher Date: 24-02-2025 Journal Voucher
|
Ledger Name |
Debit (TK) |
Credit (TK) |
Remarks |
|
Transit S/P LC-29672410050 |
4,617.00 |
|
|
|
Prime Insurance Company Limited-S.C |
|
4,617.00 |
|
Narration:
Amount payable Against insurance premium for Spare Parts LC-150129 dt.07.11.24. LC-150130 dt.13.11.24 LC-1050 dt.09.07.24
(Step-08): LC VAT+AT+AIT charges by bank:
Then we pass Journal Voucher.
Voucher No. 01
Voucher Date: 14-09-2025 Journal Voucher
|
Ledger Name |
Debit (TK) |
Credit (TK) |
Remarks |
|
Transit S/P LC-29672410050 |
190,558.00 |
|
|
|
Value Added Tax (Import) |
27,721.00 |
|
|
|
Advance Tax (AT) |
9,240.00 |
|
|
|
Advance Income Tax (Import) |
7,590.63 |
|
|
|
C & F Agent Name Against Clearing |
|
235,109.63 |
|
|
Total Amount (Tk) |
2,35,109.63 |
2,35,109.63 |
|
Narration:
Amount payable against spare parts C & F bill LC N0.29672401050 dt.09.07.24 B/E no.C-825640 dt.12.09.2024. Bill No.05/2025 date 23.10.25.
Now Check Transit S/P LC-296724010050 Ledger Balance
Now,
Ledger Balance shows:
Transit S/P LC-29672410050
|
Date |
Voucher No. |
Ledger Name |
Debit (TK) |
Credit (TK) |
Balance |
|
09.07.2024 |
VC No.01 |
LC Issue Commission charged by CD-2850 |
9462 |
|
9462 |
|
15.07.2024 |
VC No.02 |
Add Confirmation Commission by CD-2850 |
5462 |
- |
14924 |
|
28.07.2024 |
VC No.03 |
2nd QTR Commission by CD-2850 |
5096 |
- |
20020 |
|
10.09.2024 |
VC No.04 |
LC indemnity charges by CD-2850 |
1150 |
- |
21170 |
|
17.09.2024 |
VC No.05 |
Pad Creation Against S/P LC -29-1080 |
26,95,361 |
- |
2716531 |
|
24.02.2025 |
VC No.06 |
Premium Insurance paid |
4617 |
- |
2721148 |
|
14.09.2025 |
VC No.07 |
C & F bill Charged by C & F Agent |
190,558 |
- |
2911706 |
|
28.07.2025 |
VC No.08 |
Purchase Items of Spare pats |
|
29,11,706 |
Nil (Proved) |
|
|
|
Total Amount (Tk.) |
29,11,706 |
29,11,706 |
|
Frequently Asked Questions(FAQs)
1. What is landed cost of imported spare parts?
Answer: Landed cost is the total cost of imported spare parts after adding the purchase price and applicable costs such as freight, insurance, customs duty, clearing charges, and transportation to the required destination.
2. How do you calculate landed cost for imported spare parts?
Answer: Landed cost is generally calculated by adding the purchase price, freight, insurance, customs duty, clearing and handling charges, and other directly attributable import costs. The total can then be allocated to individual spare parts based on an appropriate allocation method.
3. What is the accounting treatment of landed cost?
Answer: Costs directly attributable to bringing inventory to its present location and condition are generally included in inventory cost. When the spare parts are sold or consumed, the applicable cost is recognized through cost of sales or the relevant expense/cost account.
4. What costs are included in the landed cost of imported spare parts?
Answer: Landed cost may include the supplier price, international freight, insurance, customs duty, port and clearing charges, inland transportation, and other directly attributable costs required to bring the spare parts to their intended location.
The distinction between inventory cost and later COGS is particularly important: landed costs are generally incorporated into inventory cost, with the cost flowing to COGS/expense when the inventory is sold or consumed.