Property purchased by a realty company
This query is : Resolved
04 December 2010
Hi Experts,
A real estate company has purchased a property and let out the same on a rental basis.
However, it has accounted the same as a Fixed Asset and claimed depreciation.
I am of the opinion that the same should be shown as an Investment.
Kindly provide your inputs to the said matter.
A real estate company has purchased a property and let out the same on a rental basis.
However, it has accounted the same as a Fixed Asset and claimed depreciation.
I am of the opinion that the same should be shown as an Investment.
Kindly provide your inputs to the said matter.
04 December 2010
As the company engaged in the real state business so plz refer the object clause of the memorandum of association , if there mentioned .
If in the same it has been mentioned that company will be engaged in the purchase of building and flats and whatever the name called and will resale it or let out or of the same nature .
than it will not be taken as investment ,it will be treated as a fixed asset for the company .
If you take it as investment than rent will be treated as income from other sources
It is my opinion -
As the company engaged in the real state business so plz refer the object clause of the memorandum of association , if there mentioned .
If in the same it has been mentioned that company will be engaged in the purchase of building and flats and whatever the name called and will resale it or let out or of the same nature .
than it will not be taken as investment ,it will be treated as a fixed asset for the company .
If you take it as investment than rent will be treated as income from other sources
It is my opinion -
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