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How can I verify the buildings ?

How can I verify the buildings ?

How can I verify the buildings ?

Kanishka Feb. 16, 2018

On the basis of following points, we shall do a verification of building.

(i) Firstly, you have to check the title deed of buildings to ensure whether the client holds the title on the balance sheet date. If the property has been mortgaged, the title deeds will be in the possession of the mortgagee, from whom a certificate should be obtained to that effect.

(ii) Verify the original cost of buildings by reference to the deed of conveyance. If the building is constructed by the client, verify the original cost with the cost as recorded in the books of account of the year in which the construction was completed.

(iii) Verify that appropriate depreciation has been provided against the buildings and the effective is given in the Statement of Profit and Loss.

(iv) See the appropriate lease deed, if the building is leasehold, to ascertain the cost, amortization, etc. Also ensure that all covenants in the lease deed have been fulfilled by the client.

(v) See that the buildings have been valued at cost less depreciation. If any revaluation has taken place, see the basis of revaluation and ensure that the disclosure of the same has been made.

(vi) See that the relevant particulars of buildings have been entered in the fixed assets record maintained by the client.