Land can be categorized in separate groups and accounts: bare land (no properties), land with own structures land with properties of 3rd functions and land with layers. Buildings incorporate installations, mend, diversifications and infrastructure.

Auditing of “Lands” and “Developing assignments” has the adhering to key ambitions:

– Make certain of the content existence of this sort of belongings

– Confirm whether the organization is the real owner of its personal assets

– Make sure that assets have been assessed and registered in the stability sheet in accordance to their proper worth

– Taking into consideration their upkeep condition and age, attract relevant conclusions with regard to justification of depreciation measures as well as depreciation amount and charge used:

– Make sure that obtain and transferals of mounted assets are mirrored in the bookkeeping by way of related registrations

– Assess the threats to possession of mounted property (e.g. fire) and assess them with insurance policy packages signed.

Accounting and complex tips

Auditing consists of at least the adhering to:

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

– Each and every mounted asset in this section should be crosschecked and correspond with: obtain price, cadastral evaluation, insurance worth, accounting price, mortgage alienation worth, revenue price, production value (true or theoretical), alternative worth, worth from examination and tax reports

– Comment on background of figures for all adjustments transpiring in the respective accounts of these investments

– Analyze every single indication or component relevant to accounts for lands and buildings and judge no matter whether alterations need to be regarded as investments or utilization charges

– Continue with site visits in order to notice any new installations or damages for the purpose of crosschecking them with respective fees in the bookkeeping

– Identify eventual non-occupied areas

– Ascertain the aging situation and routine maintenance of buildings and crosscheck with amortizations created till the minute of audit

– Make positive that needed amortizations have been correctly manufactured, in conformity with related rules and policies and check out calculations made for these amortizations

– Contemplate potentials for fraudulent bookkeeping: unjustified acquire at really higher price, unjustified sale at quite lower price tag, inclusion of utility fees in mounted property or vice-versa, totally free-of-charge lease contracts, cost-free-of-demand contracts for third get-togethers, use of business installations for private functions, deviations in between true price tag, registered value and the value in the genuine act

– For new structures, check the true value, eventual destruction costs and validate regardless of whether greatest delivers have been noticed

– Examine how the price of structures is decided and whether staff wages are entered in the bookkeeping
– Make positive that values have been modified to replicate changes in substitution price

– Detect situations when costs have been concealed in notary functions

– Look at procedures applied so that each and every expense buy is instantly protected by insurance policy deals

– Take a look at bookkeeping for damages in the buildings

– Analyze commissions and payments to intermediaries for the duration of buy of lands and buildings

– Look at actions to sustain fastened belongings in good condition to assure their best use (upkeep providers, periodic inspections, and so on.)

– Check out for real insurance coverage, home loan, pledged by the firm which affect land or immovable house. If indeed, take a look at the guaranties utilized and at least examine: the nature of guaranties, nature and quantity of commitments guarantied and beneficiaries

– In the annex, mention adjustments in land and immovable home transpired for the duration of audit

Unique interest should be devoted to accounting treatment of fastened assets in this area:

a) Accounting treatment for land obtain and sale

one. When land is entered in a firm’s property, the value is debited in account 211 “Land” as contribution price, acquire value or credit history respectively in account for “principal assets (person or team 1) or in the account “Partners account for contributions in the firm” or “Suppliers of mounted belongings”. Account 211 registers the price of land owned by the organization. It is important to distinguish among individual accounts, dependent on the mother nature of ingredient aspects of set property:

– Bare lands (no structures)

– Enhanced lands (with channels, and so on)

– Underground and above soil: terms used when the business is not the proprietor of the three elements attached to the exact same part of terrain: land, underground and above soil

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

– Household terrains with one much more structures.

2. Throughout income, the worth of origin for aspects sold and that of amortization, if any, are taken from the respective accounts. konsultan pajak bandung is debited to account 652 “Accounting value of elements for fixed property marketed” at the same time, account 752 “Incomes from aspects of fastened assets marketed” is credited in the debit of account 462 “Request to obtain from fastened belongings sold”. Provisions are shut in credit history of the respective subdivision of account 78 “Reacquisition of amortizations and provisions”.

b) Accounting treatment of sale-acquire operations in construction

In scenario a design is bought for a price which does not independent land price from developing price, only the building price tag portion is matter to amortization. As a result, when a firm purchases a constructing, we should make positive whether it has divided the international purchase price in share with the relative worth attributed to each of the two elements (account 211 “Land” and 212 “Creating” in the complete benefit of immovable residence).

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

– For incoming value,
– For acquire price,
or for the genuine value of home manufacturing, in credit of:
– Account a hundred and one “Principal belongings (principal or specific)” or account 4561 “Partners – Account for contributions in modern society”,
– Account 404 “Suppliers of mounted property or other respective accounts,
– Account seventy two “Creation of set property”.

2. In case of product sales, the benefit of origin for structures bought and respective amortizations are taken from their respective accounts. Their big difference is debited to account 652 “Accounting price of elements for set assets marketed” at the identical time, account 752 “Incomes from components of fastened property offered” is credited in the debit of account 462 “Request to get from fixed assets bought”. Provisions are closed in credit score of the respective subdivision of account seventy eight ” Re-acquisition of amortizations and provisions”.