Capitalisation of expense

AS 502 views 1 replies

hii

while auditing the books i found that one showroom of the company has incurred 70000/- expenses on angle racks to be used for displaying items , and incurred 30000/- for labour charges. The amount of Rs 100000/- has been shown as Building in the Books But i think it should be shown in furniture. Also i have confusion whether to Capitalise the labour charges

 

Replies (1)
Yes, it should be shown as furniture and fixtures. And labour charges are non recurring in nature. Therefore, it should be capitalised.


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