Asset - Under construction in Building account and Dep. claimed
(Querist) 14 August 2008
This query is : Resolved
For accounting year 2006-2007 our building was in construction. the Contractor has given part invoice for building while under construction and it has been booked in Buildings account. Depreciation had been claimed last year. In this accounting year 2007-2008, balance part invoices were received and that had been booked in Asset-Under Construction account. then at later stage it will be bought to Asset - Building account. Now my question is wat has to be done for the asset considered as building last year and for the depreciation considering IT and Companies Act.
(Expert) 14 August 2008
The Depreciation can be claimed under both the Act only after completion of the building. Until such time it will be work in progress.
(Querist) 15 August 2008
Wat is to be done for the depreciation claimed last year and for the Building considered as an Asset last year. can it be reversed this year??? If so please give me the details of how it could be done as per the ACT.
(Expert) 16 August 2008
Have you filed your return for 2007-08 on these facts. If yes then, kindly reverse the entries and capitalise the expenditure on building by moving the WIP to Asset on the date of completion and complete your books. If you filed return revise it.
(Expert) 01 September 2008
In these circumstances all over invesment amount whether invoiced or not invoiced by the builder shall be debited and depriciation amount is yr discretion because factory is under construction and production is nil.