Save Rs 588 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Balance sheet

Save Share

This query is : Resolved

Amit Kumar Das (Querist)
Follow

01 July 2019 Source of income of a non-profit making entity like a housing cooperative society is only its members' contributions. The society invests a portion of such contributions in bank fd in a certain financial year and shows it as asset in the balance sheet of that year. The fd matures next year and is reinvested, both original capital and interest together. The matured amount is again shown as asset in that years's balance sheet.
Now, the problem is if the interest earned on the original capital is not included in the liability side of the balace sheet, the two sides (liability and asset) are not matching.
Should it be done so and will it be in conformity of accounting procedures?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
Follow

02 July 2019 No, it's not in conformity of accounting procedures. Include interest earned on the original capital in the liability side of the balance sheet.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now