Interest accreition to corpus fund - accounting and tds treatment

397 views 3 replies

ramesh

DGM

506 Points Joined December 2010

Our company is in to business of managing serior citizens apartments, residents have contributed non refundable interest bearing corpus fund which can be used only for major repairs and maintance of apartment building, we will be accruing notional interest to corpus fund (not creiting to any indiviual ledger). these group of senior citizens will not have any registered associtation but acts through their committeee representatives....

My questions are below....

1. how to account these accrued interest.......

2. what about tds on enterest accured.....(as not creditting to any indiviual account or registred association)

regards

Ramesh N

9900156836

Replies (3)

P-SAC

Partner

152 Points Joined April 2020

Dear Sir,

Please let us know whether the notional interest you are taking into account is on realisation basis in future or based on bank rate ?

You can post your query at psandac @ gmail.com

ramesh

DGM

506 Points Joined December 2010

Interest rate is fixed, also we are giving balance confirmation to committee of residents corpus fund + accrured interest minus expenses incurred....every quarter....

Whether Statutory auditor is right in considering this interest amount as contingent liability in audited financials....

P-SAC

Partner

152 Points Joined April 2020

It is not a contingent liability since liability is determined and fixed that you are giving balance confirmation.

Further contingent liability is always a noted to accounts. Once you account your liability in your books of accounts, the nature of contingent liability is goes away.

For more information, kindly drop email to psandac @ gmail.com