India Accounting of Redeveloped property at NIL cost.

[KP. Yohlannan]

This query related to an Institution registered under Bombay Public Trust Act 1950 and Societies Registration Act.

This Institution had Flat in the vicinity, which was used for the residential purpose of the Trust employees.

Vide development agreement dated 26th June 2013 entered into by XY Housing Society Ltd, a society registered under the provisions of the Maharashtra Co-operative Societies Act, 1960 and its members, where this trust is one of the members and owns a flat admeasuring approx. 650 Sft. in the building known as MMM Apartments. Mumbai and developer M/s RYR . The Said Co-operative housing society granted exclusive development rights in favor of the developer. Accordingly, developer completed the said reconstruction and obtained building full occupation certificate on April, 16. Thereafter, after completion of all formalities, developer handed over possession of a reconstructed flat No. 9 with apprx.900 SFT to the trust. Trust continues to hold the said flat without any entry in the Asset since no expenses have been incurred by the Trust for the new reconstructed property.

Written down the value of Old flat was NIL.

The Book Value of New Flat was taken as Nil in 2016-17 accounts.

How to correct the mistake of fy.2016-17 in 2017-18 accounts by

 

[KP. Yohlannan]

No reply or answers to the query is seen till date. The question is , What is the accounting entry/ how the new asset is taken in the books of account and schedule of fixed assets for the new Flat without any cost, but against the surrender value of the old flat.

 

[Steve-LevelUp]

Unfortunately, when someone on the board doesn't comment, it typically means that we do not know. This isn't particularly helpful to you, but this group generally will not comment as a guess but will only try to provide advice in which we are confident in our answers.