Accounting treatment in books

This query is : Resolved

CA Sanjay Baheti (Querist)
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21 June 2013 Our Corporate client have purchased one mfg unit on slump sale basis. sales consideration is Rs.15 crore.For transfer of unit in favor of our client, it has paid Rs. 75 Lakh towards stamp duty Charges.

Also my client has taken term loan of Rs. 10 crore from Bank , hence the company has paid the processing fees, consultant fees etc.

Now my query is that what is treatment of stamp duty charges and processing charges & Consultant fees etc in their books of account after keeping in mind AS-10 & 26.

CA Dhaval Patel

CA Dhaval Patel (Expert)
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21 June 2013 Stamp Duty is no doubt a capital expenditure hence to be capitalized with the Unit.

Also the amount is borrowed for purchasing the Unit, hence processing fees and consultant fees also required to be capitalized.