Accounting -Capitalization of major repair cost

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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

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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26 August 2020 Such expenses can be capitalised in view of new life benefits.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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26 August 2020 Yes...You are absolutely right

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Accounting -Capitalization of major repair cost

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