Deepak Tapse
Accounts Manager
[ Scorecard : 290]
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Posted On 01 July 2009 at 12:26
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RTO & Insurance charges for New Car is to be capatilised or we can debit to P&L. For this any AS is available. Pl inform the same.
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Aayushman
PCC
[ Scorecard : 571]
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Posted On 01 July 2009 at 12:29
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Hi Deepak
Both the charges to be routed through P/L a/c and these charges don't give any benefit of enduring nature as per AS 10 "Accounting for Fixed assets"
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Kalpesh
Accountts & Income Tax
[ Scorecard : 317]
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Posted On 01 July 2009 at 13:59
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Sir,
RTO is one time tax and we can utilise it for next 15 years. cant we transfer RTO in capital assets?
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Aayushman
PCC
[ Scorecard : 571]
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Posted On 01 July 2009 at 14:14
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Oh... RTO can be capitalised. sorry but didnt know of its nature.
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praveen
CA Final
[ Scorecard : 1393]
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Posted On 01 July 2009 at 14:44
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boss it is simple
expenses having long term benefits are capitalised and those which are recurring or whoose utility is less than or equal to an year shall be routed to profit and loss account.
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Yogesh Shah
CA Final Student
[ Scorecard : 375]
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Posted On 01 July 2009 at 15:14
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Hi dude,
I think, RTO tax should be capitalized & Insurance Charges should be charged to P&L A/c. (subject to - Car is used for a business purpose.)
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RAMANJU
here to updating the knowledge
[ Scorecard : 428]
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Posted On 01 July 2009 at 15:24
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All kind of expenditures incurred in bringing the asset to put into use should be capitalised. In your case, Road Tax and Insurance charges incurred before the car put into use and the insurance charges also ( first time insurance)should be capitalised. Refer AS-10, "Accounting for Fixed Assets".
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Rajesh
Service
[ Scorecard : 13064]
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Posted On 01 July 2009 at 15:32
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Yes first insurance premium and RTO tax should be capitalized
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Aayushman
PCC
[ Scorecard : 571]
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Posted On 01 July 2009 at 18:26
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Why should first Premium to be capitalised? A little clarification on this will be quite helpful.
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