Accounting -Capitalization of major repair cost

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This discussion centres on whether significant repair costs for an imported item, sent back to a foreign supplier under a GR Waiver, should be expensed or capitalised. The consensus, guided by accounting standards like AS 10 and IAS 16, leans towards capitalisation if the repair provides substantial future economic benefits and extends the asset's life.

JAYANTA KUMAR BANDYOPADHYAY

JAYANTA KUMAR BANDYOPADHYAY (Querist)
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26 August 2020 We have sent one defect (earlier imported) item to foreign supplier for repair under GR Waiver. Repair cost runs in to Euro 1. 70 Lakhs upwards- definitely giving this a new life.
Whether this is expensed to P & L Account or be capitalised?
AS 10 -ICAI Guideline, ((IAS-16--directly attributable costs--here must be additional probable future economic benefit associated with this subsequent expenditure that will flow to the entity.)
Kindly guide,
Regards,
Jayanta Bandyopadhyay