Treatment agst.amount recd. by real state co.

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

07 June 2012 treatment of amount recd.(not refundable) by real estate co. for incurring exp. in future for power,which is deposited by co. in fdr.

whether it is liability or income. and if it is a liability what is the treatment of interest. please explain in brief

Ca Anand Dubey

Ca Anand Dubey (Expert)
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07 June 2012 Please explain the nature of receipt whether it is capital ? the interest earn on investment will be credited to capital WIP

Querist : Anonymous

Querist : Anonymous (Querist)

07 June 2012 sir actually a real estate co. has received a fixed amount for power and maintenence which is to be incurred by the co. in future. the amount is non refundable.the company has invested the amount in FDR.
tREATMENT BY cO.

TREATED AS LIABILTY IN BALANCE SHEET
INTT. ON FDR CEDITED IN PROFIT & LOSS A/C

IS THIS TREATMENT IS RIGHT OR WRONG ?
WHAT IS THE CORRECT TREATMENT