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Fixed asset - building value in accounting

P V VISWANATHAN (Others) (24 Points)

14 June 2015  

I live in a Co-op Hsg. Society in Navi Mumbai.  The builder has not yet effected conveyance. So far in our Balance sheets, we are not showing the value of the building and hence no amortization entries appears.  Is it the correct procedure? I am of the opinion that the land value / cost of the building / and / or purchase value of the members should be included in the Balance sheet and year to year amortization also be accounted for.  Can anybody please throw light on this? If so what are the accounting entries?

 3 Replies

CA Bhargav Nathwani (CA in Practice) (8307 Points)
Replied 14 June 2015

what is value mentioned in Purchase deed ? or if construction of building is yet not compeleted then do you have any agreement with builder ?



Shashank Upadhyay (Students) (288 Points)
Replied 14 June 2015

Building to be recognised in balance sheet right from the date possession is granted for the same. Thereafter amortisation should be done for each year. However in case building is purchased.... It should be recorded in books from date the registry is made. Please correct me if I am wrong.

Jaspal Singh (Practising CA) (321 Points)
Replied 14 June 2015

Building had to be recognised from date of possession..irrespective of document formalities.. Depreciation should be charged and accounted for..

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