Panchayat:Repo18/vol2-page0734

734 GOVERNMENT ORDERS

i. Any additional provision for demand outstanding required to be made during the year shall be recognised as expenditure and any excess provision written back during the year shall be recognised as income of the Panchayat.

j. Refunds, remissions of Other Incomes for the current yearshall be adjusted against the income and if pertain to previous years then it shall be treated as prior period item, wherever applicable.

k. Write-offs of Other Incomes shall be adjusted against the provisions made and to that, extent recoverable gets reduced.

l. Any subsequent Collection or recovery of 'Receivables of Rental, Fees and Other Incomes which were already written offshall be recognised as a Prior Period Income.

m. Advance/excess payment shall be treated as a liability till the tax/ charge becomes due, at which point, it shall be adjusted against receivables.

n. Part-payments received shall be first adjusted against penalty and interest, arrear demand and current demand in the listed order.

Public Works

a. The Cost of fixed assets shall include Cost incurred/money spent in acquiring or installing or Constructing fixed asset, interest on borrowings attributable to acquisition or Construction of qualifying fixed assets up to the date of Commissioning of the assets and other incidental expenditures incurred up to that date.

b. Any addition to or improvement to the fixed asset that results in increasing the utility or capacity or useful life of the assetshall be capitalised and included in the Cost of asset. Revenue expenditure in the nature of repairs and maintenance incurred to maintain the asset and sustain its functioning or the benefit of which is less than for a year, shall be charged off unless it results in increase of capacity or operating efficiency of the fixed asset, or extends its useful economic life.

C. Assets under erection/installation on existing projects and capital expenditures on new projects (including project stores) shall be shown as "Capital Work-in-Progress".

d. Provisions shall be made at the year-end for all bills received up to a Cutoff date. The Cut-off dateshall be 30 days before the date prescribed for the finalisation of Annual Financial Statements under the Rules, ie. 15th April.

e. The Earnest Money Deposit, Security Deposit and Retention Money, if forfeited, shall be recognised as income when the right for claiming refund of deposit has expired. Non Cash items received as Deposit shall not be accounted till the same in encashed. On encashment, it shall be recognised as a liability or income, as applicable.

f. Depositreceived under Deposit works shall be treated as a liability till such time the projects for which money is received is completed. Upon completion of the projects, the cost incurred againstit shall be reduced from the liability.

g. Deposit given under Deposit works shall be treated as an assettill such time the projects for which money is given is completed. Upon Completion of the projects, the Cost incurred shall be capitalised and reduced from the deposit.

h. Revenue in respect of rent of equipment provided to the contractors, deducted from their bills shall be recognised as and when the deductions are made.

i. Statutory deductions like Income Tax, Value Added Tax, Kerala Construction Workers Welfare Fund, etc., made from the Contractors bill to be recognised when the deductions are made.

Stores

a. Expenditure in respect of material, equipment, etc., procured shall be recognised on accrual basis, i.e., on admission of bill by the Panchayat in relation to materials, equipment, etc., delivered.

b. The cost of inventories shall include the purchase price including the expenditure incurred to bring the inventories to its present location and Condition i.e. freight inward, duties and taxes, etc.

C. The Earnest Money Deposit, Security Deposit and Retention Money, if forfeited, shall be recognised as income when the right for claiming refund of deposit has expired. Non Cash items received as Deposit shall not be accounted till the same in en cashed. On encashment, it shall be recognised as a liability or income, as applicable.