Depreciation

Is it necessary to take into account depreciation of a building constructed by a primary cooperative housing society used exclusively for residential purpose of only 8 members with families in the balance sheet? The building stands on a leasehold land allotted to the society by state govt. Balance sheet is audited by govt auditor.

The cooperative society was formed as per provisions of West Bengal Cooperative Society Act.

If depreciation is necessary, what should be the rate? According to Income Tax Act or Companies Act?

The society is not an income tax assessee.

Replies (2)

No need of depreciation, unless mandated by co-op soc bye-laws.

Thank you for your reply to my query. According to the Bye-laws, the audit officer may issue during audit objections for any matter and may ask for compliance of his advise regarding the same. It is duty of the society to take proper action to remove the defect pointed out. The instant society is 20 years old and govt statutory audit of its accounts has always been done every year. Depreciation of the society's fixed assets was never shown in the balance sheet and no objection was raised all these years. Only during last audit (FY 2017-18) this was raised and the society was advised to correct it. Society in its compliance report agreed to do so from the next financial year's(2018-19) account. Now, my questions are : 1. Do we have to show accumulated depreciation from 2000-01 to 2018-19 ? 2. Deprecited current value of each fixed asset after depreciation should be shown in the asset side of the balance sheet. Is it correct? 3. What about the amount of depreciation of each fixed asset? Should it be shown in the liability side of the balance sheet? A kind guidance from you will be highly appreciated. Thank you once again.

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