accounting

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rashmi (Querist)
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09 February 2010 If a company is involved in designing work then computers become the asset on which the designing is done. So should it be shown under computer A/c or it should be shown as Plant & Machinery ?

Further the design software used is more expensive than the computer itself. So how do we account for the same? Do we treat it as part of computer or do we show it as software only?

Further the software has a subscription period of 1 year after which it may have to be subscribed again. How to account for the same?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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09 February 2010 My view,

Even Computer used for desiging it is computer only, the definition will not change as P&M

Software licence can be capitalisaed separtly

Intial Software instalation can be capitalised and subsription renewal can be booked as revenue expenditure

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