what is the process for disposing of lost assets in ngos both fc and IT rules
For lost assets, follow procedure in your Asset Policy for loss of assets.
Treatment under Income Tax-for assets that were insured, if the insurance claim is more than the net block value in FA schedule, treat it as misc/other income. If the claim is less than net block value, loss should be written off from I&E statement. Remove the asset from the FA schedule. If not insured, the net block value needs to be written off. If the Asset Policy provides for recovery of loss to the organization from employee due to negligance etc., comply.
Treatment under FCRA-follow the above procedure if assets were from FC funds and present accordingly in FC audited financial statements. Annual Return FC4 does not have any provision for reporting loss of assets.
In both the FCRA and consolidated audited financial statements, provide a detailed note in Note to Accounts schedule for the loss and associated treatment.
CS Sharad Bhargava
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