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cineshjoseph (Querist)
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03 January 2011 Whether expenditure incurred on removal of vegitation, inagruation expenditure including stone laying ceremony expenditure etc need to be capitalized ?

Vivek Raju P

Vivek Raju P (Expert)
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03 January 2011 Any expenditure which is necessary for bringing the asset to its working condition for intended use can be capitalised.

Now removal of vegitation will be required to make the land clear for construction of the building and is a required task hence can be capitalised.

However foundation stone laying ceremont and inaguration are expenses more of Public relations or customary and cannot be said to incurred for bringing the asset to its working condition.

A building or any other structure can always be constructed without a foundation or inaguration ceremonies and hence dont qualify for capitalisation.

Any other views welcome

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