24 August 2012
A real estate company has purchased a bungalow,has shown it as fixed assets and has not charged depreciation against it. We argued that it has to be shown as Stock in trade but the management is reluctant? whether we can qualify the report, if yes than by which accounting standard? the comapny has earned rent income from it how to deal with it??
24 August 2012
If shown as fixed assets then they will have to charge depreciation on the same. To show it in a mutually agreaable position show it as investment and not as stock in trade where benefits of CG cannot be taken.
If shown as fixed assets then you will have to charge depreication and if not charged then qualify your audit report.
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