Accounting for tyres of car purchased
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
25 November 2011
PVT LTD COMPANY HAS A CAR. THE COMPANY PURCHASED ALL 4 NEW TYRES FOR THE CAR AMOUNTING TO RS 18000 AND SERVICE CHARGES TAKEN FOR FITTING THE TYRES -RS 700.
AS ALL TYRES ARE NEW AND IT WILL INCREASE THE LIFE OF CAR. WILL IT BE 'CAPITALISED AND ADD TO WDV OF CAR' OR EXPENSED OFF?IF CAPITALISED THEN RS 18000 OR 18700.?
AS ALL TYRES ARE NEW AND IT WILL INCREASE THE LIFE OF CAR. WILL IT BE 'CAPITALISED AND ADD TO WDV OF CAR' OR EXPENSED OFF?IF CAPITALISED THEN RS 18000 OR 18700.?
25 November 2011
It would be debit to P&L A/c because tyres increases the life and running capacity of the car but not the capacity (like either setting or load) of the car increases thus there is no any capital expenditure so written off as expenditure of Rs.18,700.
Just like as machinery think your self if any repairs to machinery i.e replacing the parts of the machinery which are required to run and work the machinery is to be treated as expenditure there is no increase in the capacity (i.e Production capacity) of the machinery but any additional item installed to the machinery to increase it's production capacity due to the changes of technology or any other then it is capitalise. So In short due to the changes to the fixed assets is any increase to the production capacity of such asset then it would be capitalise oterwise treated as expenditure.
OM SAI SRI SAI JAI JAI SAI
Just like as machinery think your self if any repairs to machinery i.e replacing the parts of the machinery which are required to run and work the machinery is to be treated as expenditure there is no increase in the capacity (i.e Production capacity) of the machinery but any additional item installed to the machinery to increase it's production capacity due to the changes of technology or any other then it is capitalise. So In short due to the changes to the fixed assets is any increase to the production capacity of such asset then it would be capitalise oterwise treated as expenditure.
OM SAI SRI SAI JAI JAI SAI
11 October 2016
Thank you Sir.......................................
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Opting our of sec 44AD
- GST Treatment of Insurance Commission for Existing GST Holder
- SALE OF MOTOR CAR BY REGISTERED INDIVIDUAL
- Copyright software
- Value of property in capital gain
- Regarding appeal to GSTAT
- Form 121 & TDS deduction
- Transporter Declaration form
- Regarding TDS Applicability For Director Remuneration
- Multiple trade mark
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
- Address Change to another state of a Registered Trust with 12AB approval
- Updated return in budget 2026
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
