Assets under FCRA

Assets under FCRA

Investments (Fixed Deposits)

Creation of Fixed Deposits: As far as the creation of fixed deposits of FCRA funds is concerned, there is no bar on it. All the funds are required to be received in the designated bank account but any temporary surplus funds may be placed in fixed deposits with the bank, pending utilization for the objects for which they were received. Care should be taken that the investments are in compliance with the section 11(5) of the Income-tax Act.

Interest earned on Investments: It may be noted that since the interest earned on investments is considered as FC receipts, such interest earning should be deposited in the designated FC Bank account and should be reported under the Interest Column in the FCRA Annual Returns

Investment register

Rule 4 of FCRR 2011 provides that all persons shall maintain separate register of investment made out of FC funds.

Disclosure Requirements

The details of the FDs made out of FC Funds needs to be disclosed in the FCRA Annual Returns and hence, the organization should maintain necessary records for such compliance and reporting purposes. The following details need to be disclosed

1. Opening Balance of FDs
2. FDs made during the year
3. FDs realized during the year
4. Closing Balance of FDs
5. Interest received from FDs

• Income from FC machines and equipments such as photocopier, Projectors, laptops, utensils etc.
• Income from FC vehicles.
• Income from FC projects.

Disclosure requirements and Books of Account

Following Information regarding Assets are required to be given in the Annual Return:

• Details of purchase of fresh assets
• Details of moveable assets created out of Foreign Contribution 
• Details of Immovable Properties acquired out of Foreign Contribution

It should be noted that Creation of Asset and income from Assets incurred by the association needs to be disclosed separately while filing the Annual returns in the form FC-4. Therefore, it becomes important that while maintaining FCRA Books of Accounts, Creation of Asset and income from Assets is recorded separately in such accounting procedures. The maintenance of books of accounts is pivotal to comply with the reporting requirement under the revised annual returns of FC-4.