surya gaurav (consultant) (70 Points)
09 May 2011sir,
I have filed some cases in court for cheque bounce pertaining to defaulter member of a coopeartive society.
now i am confused that whether I should post the fee entries to expense or post them as receivable and show in assets side.
please make clear.
obliged to all of my learned friends who reply or even spare time to read my query,
thanx in advance.
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 09 May 2011
it should be posted as "legal expenses", and deducted from income in current year.
however in year of recovery it will make gain and would get added to income.
surya gaurav
(consultant)
(70 Points)
Replied 09 May 2011
CAn anyone clear , . I am a bit confused,
thanx
Prerak
(Partner)
(51 Points)
Replied 10 May 2011
Agree with U.S. Sharma..............Just read definiton of Asset.............and evaluate yourself.......
surya gaurav
(consultant)
(70 Points)
Replied 10 May 2011
I am not concerned for the compensation/fine to be provided by court. But the amount already paid for the initiation of legal proceeding. and it is already paid to lawyer, Cooperative society already informed the defaulter member regarding that legal fee by regd. ad. , so it is clear to defaulter that he will be charged the legal fee.
and the case is not in dispute it is something like recovery process suit.
moreover, what is the way to take the fee amount into member's liability and asset of society , so that society will not face loss due to necessary litigation charges incurred by it.
please explain .
thanx
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 10 May 2011
debit the defaulting party - it will stand as debtors
credit the legal fees and expenses
this will neutralize the P/L account and the whole such expenses would get receivable from the defaulter.
CAclubindia
