Q. My Query is w.r.t. NON CORPORATE ASSESSEE where Tax Audit exists

Question

Respected Sir,

My Query is w.r.t. NON CORPORATE ASSESSEE where Tax Audit exists

We have all kind pf assets ( i.e. Property ( Building ) ,  plant & Machinery and equipments) in our book from past 20 plus years and appearing in books ad WDV as of date 31.03.2023. As it is too old the assessee does not have the details of Gross Value ( Actual Cost), accumulated depreciation, addition and deductions from the date of purchase of that asset till today. As per the old practice of FA it was not in practice as well as not mandatory to maintain all the said desire details to disclose  in financials of the NON CORPORATE ASSESSEE.

My query is as per the latest guidelines issued by ICAI for preparation of financial statements of non-corporate entities for non-current assets where we have to mention reconciliation of the gross and net carrying amounts of each class of assets at the beginning and end of the reporting period showing additions, disposals, acquisitions through business combinations, amount of change due to revaluation (if change is 10% or more in the aggregate of the net carrying value of each class of intangible assets)and other adjustments and the related amortisation and impairment.

Therefore, keeping the ICAI guidelines in mind , kindly advise  what amount / figure should we take for reporting of gross block at beginning of the year. Can we use WDVof previous year as gross block. Further , also guide for this year,  how we have to make disclosures in audit report as this year is the first year of absorbing the new guidelines for non corporate assessee.

I would be highly obliged if you could please help all of us in resolving this query with an example taking the format as given in the guidelines  w.r.t. to PPE Schedule.

Answer 1

The non-corporate entity should have the details of the original cost of the property, plant and equipment to comply with the accounting standard 10, which is there in the new format also. In case the same is not available, appropriate reporting should be done by the auditor in the audit report in form 3CB para 3(a) that the accounting standard 10 has not been complied with.