I AM AUDITING A CHARITABLE TRUST, GOVT SANCTIONED RS.500000/- TO CONSTRUCT A BUILDING. NOW CONSTRUCTION OF BUILDING HAS BEEN COMPLETED AND THE PAYMENT GOES TO THE CONTRACTOR ACCOUNT NOW MY QUESTION IS HOW TO TREAT THE BUILDING ACCOUNT IN THE TRUST BALANCE SHEET. BECAUSE THE AMOUNT NOT COME TO TRUST BANK ACCOUNT. WHICH HEAD SUITABLE FOR THAT.
04 March 2020
As per my understanding the Trust is receiving a grant for Construction of Building and the same is directly paid to Contractor . If I am correct in understanding the question , The same will be Covered By Ind AS 20. The Building will be recognized at fair Value and the grant received will be shown in balance sheet under liabilities as deferred Income . The Building will be depreciated in useful life and the deferred income will also be transferred as Income for useful life
MLA GRANT DIRECTLY PAID TO THE CONTRACTOR FOR CONSTRUCT THE BUILDING. BUT IF IT IS WRONG TO SHOWN AS CIVIL WORK OR BUILDING WORK IN THE ASSETS SIDE OF THE BALANCE SHEET.
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