Considering your situation with leasehold improvement assets and the impact of returning the office space due to COVID-19, here are some insights:
1. **Amortization of Leasehold Improvements**: Leasehold improvements are typically capitalized and amortized over their useful life. In your case, you mentioned that Rs. 60 lakhs is still to be amortized over the remaining period.
2. **Financial Impact**: Returning the office space prematurely due to COVID-19 has left you with a significant unamortized balance (Rs. 60 lakhs).
3. **Treatment in Financial Statements**: - **Balance Sheet (BS)**: It's not common practice to park unamortized amounts under "pending for appropriation" in the balance sheet. Normally, leasehold improvements are capitalized and then amortized over their useful life. However, if you no longer have the asset (office space), the unamortized balance might need to be adjusted in your financial statements. - **Profit and Loss (PL)**: The unamortized balance (Rs. 60 lakhs) should ideally be charged to the PL as an impairment or loss on disposal of the asset in the period when the decision to return the space was made. This reflects the economic reality of the asset no longer being available for use.
4. **Accounting Treatment**: - Discuss with your accountant or financial advisor to determine the exact accounting treatment under your jurisdiction's accounting standards (such as Ind AS or IFRS). - Consider if impairment accounting applies due to the COVID-19 impact on the business operations.
5. **Amendment of Financial Statements**: You may need to adjust your financial statements to reflect the impairment or disposal of the leasehold improvement asset. This adjustment should be made in accordance with accounting principles to accurately represent the financial position of your company.
6. **Consultation**: For specific guidance tailored to your circumstances, it's advisable to consult with a professional accountant or financial advisor who can provide detailed advice based on your company's financial statements and the applicable accounting standards.
I hope this helps clarify your options regarding the treatment of the unamortized balance of leasehold improvement assets after returning the office space.