Co-working / Flexible Office Space Audit Checklist
CO-WORKING / FLEXIBLE OFFICE SPACE AUDIT CHECKLIST
Entity: {{client_name}} · Year ended: {{period_end}}
Purpose: test Ind AS 116 lease accounting for the co-working operator, revenue recognition for flexible/hot-desk membership models, and GST treatment of commercial space rental.
A. Ind AS 116 — lease accounting for the operator
| Test | Result / Observation |
|---|
| Head leases taken by the operator from building owners are recognised as right-of-use assets and lease liabilities per Ind AS 116, with the discount rate and lease term (including reasonably certain renewal/break options) documented | |
| Sub-leasing of desks/cabins/rooms to members has been classified as an operating or finance sub-lease with reference to the right-of-use asset (not the underlying head-lease asset), per Ind AS 116's sub-lease guidance | |
| Fit-out costs incurred by the operator are correctly capitalized (as leasehold improvements or added to the right-of-use asset, per policy) and depreciated over the shorter of their useful life or the lease term | |
| Variable lease payments (e.g. revenue-share arrangements with landlords) are expensed as incurred, not included in the initial lease liability measurement, unless they are in-substance fixed | |
B. Revenue recognition — flexible membership models
| Test | Result / Observation |
|---|
| Monthly/annual membership fees are recognised over the membership period, not upfront on sign-up | |
| Security deposits collected from members are recognised as a liability, not as revenue, with any non-refundable portion recognised on the correct trigger event | |
| Pay-per-use/hot-desk revenue (day passes, meeting-room bookings) is recognised at the point the service is rendered | |
| Ancillary revenue (printing, F&B, virtual office/mail-handling services) is separately identified and recognised on its own appropriate basis, not bundled into membership revenue | |
C. GST on renting of commercial property
| Test | Result / Observation |
|---|
| GST is charged on membership/desk-rental fees at the applicable rate for renting of commercial property/support services, correctly distinguished from any residential-use exemption that does not apply to commercial co-working | |
| Input tax credit on construction/fit-out costs has been tested against Sec 17(5) blocked-credit restrictions for works contract and construction of immovable property (not routinely available for a building's own construction, though fit-out treated as plant may differ — verify the specific fact pattern) | |
D. Conclusion
Conclusion on lease accounting, membership revenue recognition, and GST treatment: ____________________________________________
| Prepared by | Reviewed by | Engagement partner |
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