We are a co-operative housing society in Mumbai and have recently overhauled our lift in the building. We have used the building funds lying in the Repair Reserve Fund for the said purpose. Am I bound to show the capital asset separately or can I reduce the same from the Repair Fund account?
We don’t wish to claim depreciation and unnecessarily show a high reserve for life
Repair Reserve Fund
As per Last Year Balance sheet 10,00,000
Addition during the year 50,000
Interest on Fixed Deposits 90,000
Less:Utilisation for Upgradation of lift
(As per schedule – C Annexed) 6,95,150
I C Naik
You can reduce the repair reserve to that extent. When expenditure brings in to existence significant benefits to owner its expense can be spread over 5-10 years. Lift’s working after up-gradation and before did not have any difference for lifts users. Your presentation is in order.
