Should godown rent for keeping capital asset purchased till it is put to use be capitalised?
CA AYUSH AGRAWAL
(Kolkata-Pune-Mumbai)
(26986 Points)
Replied 03 March 2010
The cost of a purchased fixed asset should consist of its purchase price including import duties and other non-refundable taxes and levies and any directly attributable cost of bringing the asset to its working condition for its intended use..........
So, If These Rent of Godown Expenses Helping in Bringing asset in Working Condition, Then They Shub B capitalized.......
First!!!!
(student)
(162 Points)
Replied 09 March 2010
Assets as per Accounting Standards are capitalised on ready to use basis and not put to use basis. So if ur asset was ready to use but still kept in the godown so rent cannot be capitalised on the same.
Assets as per Income Tax Act are capitalised on put to use basis.
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