14 November 2013
it depends on the sort of improvement you have made to it.
If it adds value to the building then yes, it is of capital nature.
Querist :
Anonymous
Querist :
Anonymous
(Querist)
14 November 2013
ok sir actually my question is 1. what ever expenses made for building that will come under the assets ok 2.if i added to building ac those expenses it reduce the value of the improvement(already this i maintaining as asset).how i can i added this value 2.this should be added to capital a/c.those made exp for building or not.
15 November 2013
the point is whether you have made minor repairs or major repairs/ improvements.
In case of minor repairs such as replacing a window pane should be expensed out.
But major repairs such as repairing damaged foundation beams should be capitalized as such expense help in increasing the life of the asset.
Improvements refer to certain additions etc made to the asset. For eg in case of adding RAM to a computer will increase its speed thus adding value. Such major repairs and improvements should be capitalised.
next, please understand capitalization doesn't mean that you make additions to the capital A/c. It only means that you add such expense to the asset block.
CAclubindia
