Sir,
I would like to receive clarification for the below points:
a) As a society having FCRA registration can we help other Institutions ( not belonging to us or neither registered with FCRA) acquire assets like Computers, Vehicle etc.,
b) How should the assets – comp, medical equipment etc purchased for projects be treated in the FCRA Accounts – should it be treated as project expenses or as Assets of the NGO.
c) Can we help an Institution where some of our sponsored children are studying improve the facilities of the school.
d) How to deal with community projects?
Beulah S
a) After amendment made in Section 7 in 2020, no Foreign Contribution can be transferred to any other NGO. It may be noted that the definition of Foreign Contribution includes in-kind donations (article), hence no computers, vehicle, etc. can be given to any other NGO, whether registered under FCRA or not.
b) Whether an item should be treated as asset or revenue item (100% write off in Income & Expenditure) would depend on your capitalization policy. Generally most NGOs treat any asset with more than Rs 5000 in value and having a useful life of more than 12 months as capital item and generally is capitalized. Considering computer equipment, medical equipment are capitalised, as these have long useful life. You may consult your auditor in this regard.
c) As explained under (a) above, after amendment in Section 7 avoid even donation to other NPOs.
d) As long as community projects are being executed by your NGO, you can treat these as project expenditure, provided there is no transfer of assets to another NGO.