AS-26 Intangible Assets
This query is : Resolved
Mukesh S Boudai
(Querist)
23 September 2009
We are Electricity Transmission company. Before installation of 'Electricity Transformer', we make survey of land and assess it for feasibility of project. There may be gap of 1 to 3 years between above exercise and actual construction of Asset. My question is - Should the expenditure on survey and preparation of feasibility report be capitalised with cost of Asset as 'Development Expenditure' or should it be expensed out as 'Research Expenditure' as given in AS-26 Intangible Assets ?
CA. B.SRINIVASULU
(Expert)
23 September 2009
It should be expended as research expenses as the value of asset will not go up beacuse of that expenditure.
Simple terms the asset value will not increase because of the above expenditure.
Simple terms the asset value will not increase because of the above expenditure.
23 September 2009
agree
24 September 2009
My opinion is that expenditure on survey and preparation of feasibility report will not come under research and development expenditure.
As per AS 10 these expenditure is to be capitalized to the cost of Electricity transformer.
As per AS 10 these expenditure is to be capitalized to the cost of Electricity transformer.
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