CA Deepak Joshi (TaxTalk) (178 Points)
17 May 2011Hey frnds, i hv a doubt and foping that you could clear it...
I am doing audit for a NGO... now its accounting policy states that Dep is charged for full year irrespective of sale/purchase transactions.
In my view its wrong but i can't find a solid proof to back my claim. I wish to invite your comments on the problem stated.
Any documentry evidences would be appriciated. So pls suggest me the solution / views...
Thanking in anticipation...
CA Deepak Joshi
(TaxTalk)
(178 Points)
Replied 17 May 2011
Hey all,
I am modifying my query as below:
When asset is purchased--- dep for full yr is provided irrespective of date of acquisition
When asset is sold--- no dep is provided..
Is this approach correct??
CA Deepak Joshi
(TaxTalk)
(178 Points)
Replied 17 May 2011
No answers till now ?????
Pls can anyone help!!!
hi deepak
as per the info given by u...it is an accounting policy being followed by NGO. In case of income tax the depreciation will hav to be strictly calculated as per the provisions of Sec 32 of the act. In case of Cos. Act, it has been provided that depreciation will have to be provided proportionately on the basis of the number of days for which the asset has been in use both in the year of purchase and the year of sale. But practically in some organisations this is not followed. The place where i am auditing also follows the same procedure as told by you. In strict sense it is wrong but in practical situations it is quite prevalent. There is nothing wrong in following this policy as long as it is being followed consistently over the years.
CA Deepak Joshi
(TaxTalk)
(178 Points)
Replied 17 May 2011
Thanks fr d reply Shini....
But is there any reason for following the practice listed by you???
CAclubindia
