Exam Connected with Bookkeeping Regarding Lands Plus Structures – Accounting In addition to Taxes Methodology

Land can be categorized in individual categories and accounts: bare land (no structures), land with own properties land with properties of third parties and land with layers. Buildings consist of installations, fix, adaptations and infrastructure.

Auditing of “Lands” and “Building initiatives” has the subsequent significant targets:

– Make confident of the materials existence of these kinds of belongings

– Confirm whether or not the company is the real owner of its possess assets

– Make certain that belongings have been assessed and registered in the balance sheet according to their appropriate value

– Contemplating their maintenance problem and age, draw related conclusions with regard to justification of depreciation steps as properly as depreciation amount and fee applied:

– Make confident that acquire and transferals of fixed property are mirrored in the bookkeeping through appropriate registrations

– Assess the threats to ownership of mounted property (e.g. fireplace) and examine them with insurance coverage deals signed.

Accounting and specialized 香港會計師樓 involves at the very least the pursuing:

– Check out the justification of residence on land and other immovable home, residence titles, cadastral registers, house loan registers and purchase contracts on the day of equilibrium sheet

– Every single fastened asset in this part need to be crosschecked and correspond with: acquire value, cadastral assessment, insurance coverage benefit, accounting value, mortgage alienation benefit, revenue worth, generation worth (genuine or theoretical), substitution value, value from assessment and tax reviews

– Comment on history of figures for all alterations taking place in the respective accounts of these investments

– Analyze each indicator or aspect relevant to accounts for lands and buildings and decide whether modifications need to be considered as investments or utilization fees

– Commence with site visits in purchase to observe any new installations or damages for the function of crosschecking them with respective charges in the bookkeeping

– Discover eventual non-occupied areas

– Ascertain the aging condition and routine maintenance of properties and crosscheck with amortizations manufactured until the instant of audit

– Make confident that essential amortizations have been correctly produced, in conformity with related laws and policies and verify calculations made for these amortizations

– Take into account potentials for fraudulent bookkeeping: unjustified purchase at really high price, unjustified sale at extremely lower value, inclusion of utility charges in fastened assets or vice-versa, free-of-demand lease contracts, free-of-demand contracts for 3rd functions, use of business installations for private reasons, deviations among real cost, registered cost and the cost in the genuine act

– For new properties, check out the actual price, eventual destruction expenses and confirm no matter whether best gives have been observed

– Take a look at how the cost of buildings is decided and whether staff wages are entered in the bookkeeping
– Make confident that values have been modified to reflect modifications in replacement value

– Detect cases when prices have been hidden in notary functions

– Take a look at procedures utilized so that every expense acquire is right away protected by insurance coverage offers

– Analyze bookkeeping for damages in the properties

– Look at commissions and payments to intermediaries for the duration of purchase of lands and structures

– Analyze steps to maintain fixed belongings in excellent condition to guarantee their greatest use (upkeep companies, periodic inspections, and so forth.)

– Check out for real insurance coverage, home loan, pledged by the business which impact land or immovable property. If of course, take a look at the guaranties used and at minimum check: the nature of guaranties, nature and volume of commitments guarantied and beneficiaries

– In the annex, point out adjustments in land and immovable house occurred throughout audit

Specific attention should be devoted to accounting therapy of set property in this part:

a) Accounting remedy for land acquire and sale

one. When land is entered in a company’s belongings, the worth is debited in account 211 “Land” as contribution price, acquire price or credit rating respectively in account for “principal property (individual or group one) or in the account “Associates account for contributions in the company” or “Suppliers of fixed assets”. Account 211 registers the worth of land owned by the company. It is important to distinguish among individual accounts, primarily based on the character of element elements of set belongings:

– Bare lands (no structures)

– Enhanced lands (with channels, and many others)

– Underground and previously mentioned soil: phrases used when the business is not the operator of the three elements attached to the exact same element of terrain: land, underground and earlier mentioned soil

– Exploited lands (carriers, mineral levels) which are the only factors matter to depreciation

– Household terrains with 1 much more buildings.

2. In the course of revenue, the worth of origin for components sold and that of amortization, if any, are taken from the respective accounts. Their web sum is debited to account 652 “Accounting worth of aspects for fixed belongings offered” at the same time, account 752 “Incomes from elements of mounted assets marketed” is credited in the debit of account 462 “Request to get from mounted property bought”. Provisions are closed in credit history of the respective subdivision of account seventy eight “Reacquisition of amortizations and provisions”.

b) Accounting treatment method of sale-acquire functions in development

In circumstance a development is acquired for a value which does not individual land price tag from building value, only the constructing cost part is matter to amortization. Consequently, when a firm buys a creating, we have to make sure whether or not it has divided the global obtain value in proportion with the relative worth attributed to every of the two elements (account 211 “Land” and 212 “Developing” in the overall benefit of immovable house).

1. When buildings are entered as company house, account 212 “Properties” or its subdivisions are debited:

– For incoming benefit,
– For acquire value,
or for the genuine price of residence creation, in credit of:
– Account one hundred and one “Principal property (principal or individual)” or account 4561 “Associates – Account for contributions in culture”,
– Account 404 “Suppliers of mounted belongings or other respective accounts,
– Account seventy two “Production of fastened property”.

two. In circumstance of sales, the value of origin for properties marketed and respective amortizations are taken from their respective accounts. Their difference is debited to account 652 “Accounting value of factors for set belongings bought” at the very same time, account 752 “Incomes from elements of fastened belongings offered” is credited in the debit of account 462 “Ask for to acquire from fixed property sold”. Provisions are closed in credit of the respective subdivision of account seventy eight ” Re-acquisition of amortizations and provisions”.

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