Confusion on classification of assets
Hi, Please help me with the below mentioned confusions on classification of assets in ITR form's Balance sheet:
1) Security deposit: Say, a deposit given to a company which is for a contract period of above one year as on balance sheet date. Where to show it in itr's balance sheet as it is not a current asset. I couldn't find any other than long term investments: govt. and other securities unqouted.
what if, the refund of security is dependant on 'till the business goes on' i.e. there is no fixed term of business contract and the security would be refunded immediately when dealings are closed. Then say the security money is given on 31st march and is refundable only when dealings are over would it be current asset on balance sheet date being 31st march ?
2) Same is the situation with FDR: If a person makes investment in fdr on 31st march the balance sheet date for a term longer than 1 year where it would be shown in itr form's balance sheet?
I assume these all cases relate to an individual, partnetship firm and nothing is related to companies act.
In case of partnership firms:
In ITR-5 we have an option in balance sheet 3b(ii), where we can mention the Deposits, Loans and advances to corporates and others. I believe this is the perfect field for security deposits.
Also the related amount should be mentioned in field 3b(v(a)), for the purpose of business or profession.
I believe Income Tax utilities are not prepared by refering to accounting standard (in case of partnership or individual). FDR, Security deposits will have to be mentioned under the current assets.
In case of companies you have perfect utility prepared with reference to AS and schedule VI.
Conclusion as per me is that both these things have to be shown under current assets.