1. Which accounting standards are applicable on charitable trust?
2. Whether depreciation and provision for tax will be charged in P&L a/c of charitable trust or not?
1. Which accounting standards are applicable on charitable trust?
2. Whether depreciation and provision for tax will be charged in P&L a/c of charitable trust or not?
If the charitable trust is established wholly & exclusively for the purpose of charity & not even a single part of its activity is carried on for business purposes then the AS's are N/a to the charitable trust. However if it proved that even if a single objects of the trust are carried on for business then the AS's would ebcome applicable.
Trust's income is exempt from the payment of I-T, so there is no need of making provision for tax. Depreciation shud be charged to P&L at the rates specified as per the I-T Act.
Exclusive Trust (100% for charity)- If none of the AS are applicable on it then what are the rules for accounting in trust.
Non exclusive Trust - As per the trust definition an entity has to invest 85% of the income into charitable purpose to maintain the charitable trust status. Which means 15% of the income can be invested into other business purpose. In that case will that trust be considered under non exclusive trust ( all AS applicable) or not?
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