Nikky (Chartered Accountant) (552 Points)
21 September 2009HELLO FRIENDS
I AM DOING AUDIT OF A TRUST
HERE I HAVE SEEN THE TRUST IS IN RECEIPT OF AMOUNT TREATED AS CORPUS FUND.
THEY ARE CAPITALISING THE AMOUNT RECEIVED AS CORPUS FUND.
I WANT TO KNOW WHAT EXACTLY IS CORPUS FUND AND WHAT ARE ITS USES. FROM WHAT POINT OF TRUST AUDIT SHOULD BE SEEN.
vikaskamra
(CA Final Student)
(132 Points)
Replied 21 September 2009
Corpus is just like a capital to trust
if the trust is capitalising some amount as corpus, see if the person giving the donation to trust has earmarked it to corpus or not
CA LOVELY ARORA
(C.A. B.Com (H) Graduate)
(2151 Points)
Replied 21 September 2009
Corpus fund should be understood as the capital of the organisation; the funds generated and kept for the existence and sustenance of the organisation. Corpus funds are generally created out of corpus donation. A donation will be treated as corpus donation only if it is accompanied by a specific written direction of the donor. In the absence of any written direction of the donor, a contribution or grant cannot be transferred to corpus fund. It is important to understand that in case of a corpus fund, the funds are restricted but the purposes are not restricted. Corpus fund is an unrestricted permanent fund. The restriction is on the use itself rather than the type of use. A corpus fund may be used in exceptional circumstances, where the survival of the NGO is at threat. Such decisions are rarely taken and should be taken at general meetings. As such there is no legal bar on application of corpus funds for charitable purposes. But for all practical purposes corpus fund is a permanently closed fund with no strings or restriction for future application attached.
Bhau Katdare
(President)
(22 Points)
Replied 26 July 2019
We have a trust and a donation received with specific instructions to use it in the next two years for a school project. We have treated it as corpus fund and kept the amount in Flexi Fixed Deposit. We have utilized the amount in two years as per instructions of donor. Is there any violence of IT section 11(1)(d).
CAclubindia
