INDAS16- Warehouse Leasing

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This discussion examines whether a company has control over a warehouse leased by its C&F agent, particularly when paying fixed charges that include warehouse use. The consensus suggests that the company likely doesn't have an identified asset on its books, as the C&F agent typically retains control over warehouse usage, subject to specific contractual requirements. Expenses are usually reimbursed, with the C&F agent receiving incentives.

Raj Dutta

Raj Dutta (Querist)
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01 April 2020 Dear Experts

Company A has appointed a C&F Agent , who is providing the services from a warehouse owned by him/Lease from some one else.

Lets say the company pays Rs X as per month fixed charges that included use of the warehouse as well.
the company decides how the warehouse will be maintained , temperature etc among others .

In such a cases is there an identified asset . Do the company has a control over the use of the ware house .

Many Thanks in advance

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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08 May 2020 There can not be any form of assets in the books of accounts for the company. C&F have to meet the periodical sales targets or other requirements as per agreements and how warehouse is being used is mostly in control of C&F only subject to any specific requirements which may vary from case to case basis and based on industry. Expenses are being reimbursed by the company and C&F gets target incentives and other incentives as agreed.

Hope it helps. I would also request seniors to add more on this.

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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14 June 2020 There can not be any form of assets in the books of accounts for the company. C&F have to meet the periodical sales targets or other requirements as per agreements and how warehouse is being used is mostly in control of C&F only subject to any specific requirements which may vary from case to case basis and based on industry. Expenses are being reimbursed by the company and C&F gets target incentives and other incentives as agreed.

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