16 December 2013
Hello every one, I have a query on Impairment loss. Q1) Whether you will write off of the full value of asset (Building) when you have impairment(i.e, Building has been demolished in my case) ? Q2) What kind of supporting document you can find while doing audit and IT scrutiny ?
17 December 2013
With a very specific view of demolished building It should be eliminate from the financial statements as required under para 25 of AS 10 and para 58 of AS 28.
25. Fixed asset should be eliminated from the financial statements on disposal or when no further benefit is expected from its use and disposal.
58. An impairment loss should be recognised as an expense in the statement of profit and loss immediately, unless the asset is carried at revalued amount in accordance with another Accounting Standard (see Accounting Standard (AS) 10, Accounting for Fixed Assets), in which case any impairment loss of a revalued asset should be treated as a revaluation decrease under that Accounting Standard.
For the purpose of Audit Stamp registration of the land or Lease agreement, Diversion documents, T&CP approval, Completion Certificate of the building demolished, proof of payment of property tax to local authority, approval of demolition from local authority and payment of charges related therewith, copy of application to Electricity / Water / Telephone / Other Utility department to either terminate or temporarily discontinue the services, disposal of material / scrap / waste, detail of expenses of demolition and payment thereof etc. should be tested with a view point to substantiate existence of the assets and its demolition / elimination.
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