Accounting Standards

This query is : Resolved

Sanjay (Querist)
Follow

06 November 2008 I would like to know as to the basis on which a company decides on whether to capitalise an expenditure or not. The normal stance is that where an expenditure is likely to give an enduring benefit, it is to be treated as Capital and where the benefit does not extend beyond a year, the same can be charged off in the same year. The query is whether this basis is as per Accounting Policy of each company or is it governed by the Accounting Standards issued by ICAI?

Ram Avtar Singh

Ram Avtar Singh (Expert)
Follow

06 November 2008 its depend on nature of exps. but generly following AS issued by ICAI. and answer of your question is correct given in your question.(The normal stance is that where an expenditure is likely to give an enduring benefit, it is to be treated as Capital and where the benefit does not extend beyond a year, the same can be charged off in the same year. )

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

06 November 2008 The basis of capitalisation as you rightly raised are followed by companies, and accepted by courts also, well before the introduction of Accounting standards by ICAI. Now companies can continue the accounting polices regularly followed subject to the disclosure of deviations ,if any, from the accounting standards to comply with the provisions of 211(3C) of the companies act,1956.

Sanjay

Sanjay (Querist)
Follow

08 November 2008 Sir,

Which Accounting Standard by ICAI are we talking off. Is it the guidance notes? Kindly clarify.

Sanjay

Sanjay (Querist)
Follow

11 November 2008 1

Deepak Agrawal

Deepak Agrawal (Expert)
Follow

12 November 2008 AS 10 - Fixed Assets.

It depends on mangement of company to decide whether any addition is of enduring nature. Idf yes, it should be capitalised.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

tsrandcompany@gmail.com

John Ravindran Moses

CA Uzma Khan

Adv Ashish Vishwakarma

yadagiri

Subscribe Now

Accounting Standards

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Manager- Finance and Compliance

Accountant

GST CONSULTANCY

CA Final

GST CONSULTANT

Senior Executive