Comments on the Constitution of The Fixed Asset Schedule :
(I) Premises:
i. At the cost as on 31st March of the preceding year;
ii. Addition During the year;
iii. Deduction during the year;
iv. Depreciation to date
Premises wholly or partly owned by the banking company for the purpose of business including residential premises should be shown against ‘Premises’. In case of premises and other fixed assets , the previous balance, addition thereto and deduction there from during the year as also the total depreciation written off, should be shown. where sums have been written off on reduction of capital or revaluation of assets, every balance sheet after the first balance sheet subsequent to the reduction or revaluation should show the revised figures for a period of five years with the date and amount of revision made.
(II) Other Fixed Assets (Including Furniture and Fixtures):
i. At cost as on 31st March of the preceding year;
ii. Addition during the year;
iii. Deduction during the year;
iv. Depreciation to date.
Motor vehicles and all other fixed assets other than premises but including furniture and fixture should be shown under this head.
Principal Accounting Policies W.R.T. Fixed Assets:
The premises and other fixed assets except for foreign branches are accounted for at their historical cost. Depreciation is to be provided for on written down value method at the rates specified in Income Tax Rules 1962. Depreciation in respect of assets of foreign branches is to be provided for as per the local laws.
Disclosure of Accounting Policies W.R.T. Fixed Assets:
Premises and other fixed assets are to be accounted for at their historical cost. Premises which have been revalued are accounted for at the value determined on the basis of such revaluation made by professional valuer, and the profit arising on revaluation is to be credited to Capital Reserve.
Other Assets (Schedule 11):
(I) Inter/Office Adjustment (Net): The Inter –office adjustment balance, if in debit should be shown under this head. Only net position of inter-office accounts, inland as well as foreign, should be shown here. For arriving at the net balance, if in debit, only shuld be shown representing mostly items in transit and unadjusted items.
(II) Interest Accrued: Interest accrued but not due on investment and advances and interest due but not collected on investments, will be the main components of this item. As bank normally debits the borrower’s account with interest due on the balance sheet date, usually there may not be any amount of interest due on advances. Only such interest as can be realized in the ordinary course should be shown under this head.
(III) Tax Paid in Advance/deducted at source: the amount of tax deducted at source, advance tax paid etc. to the extent that these items are not set-off against relative tax provisions should be shown against this item.
(IV) Stationary and Stamps: only exceptional items of expenditure on stationary like bulk purchases of security paper, loose leaf or other ledger, etc., which are shown as quasi assets and are to be written off over a period of time, should be shown here. The value should be on realistic basis and cost escalation should not be taken into account, as these items are for internal use.
(V) Non-banking assets acquired in satisfaction of claims: Immovable properties/tangible assets acquired in satisfaction of claims are to be shown under this head. In case of nonpayment of claims, such assets are taken in possession for recovery. Profit or loss on sale of such assets, is to be disclosed separately in profit and loss account.
(VI) Others: This will include items like claims which have not been met, for instance, clearing items, debit items representing additions to assets or reduction in liabilities which have not been adjusted for technical reasons, want of particulars etc., advances given to staff by the bank as employer and not as banker etc. Items which are in the nature of expenditure, which are pending adjustments should be provided for and the provision netted against these items so that only the realizable value is shown under this head. Accrued income other than interest may be included here.
(VII) Safe deposit vaults and lockers are assets included under “Furniture”.
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