Building Repairing Work Expenses Out or Capitalized

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SACHIN (Querist)
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12 May 2023 Dear Sir,

We made repairing work at office ceiling due to Water leakage & Costing is around 10 Lacs.
Approx. 6 Lacs for labouring & 4 Lacs for material use for repairing Both supplier is separate.

Now Question is that this would be Expense out or Capitalized in books ?
Please explain.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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12 May 2023 Such expenses are generally capitalized.

SACHIN

SACHIN (Querist)
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12 May 2023 Suppose We capitalized but the same situation is happen after Certain years, & Expenses will incurred.

So, What to do in this situation.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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12 May 2023 Depends upon nature of repairs and its life cycle.

SACHIN

SACHIN (Querist)
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15 May 2023 As I confirmed that this will be last up to 4 to 5 years or may be some unexpected years.
So in this case should we capitalized or Expense out ?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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15 May 2023 Its capital expenditure and allowed for depreciation, no other option.

CA Syed Raza Abbas Rizvi

CA Syed Raza Abbas Rizvi (Expert)
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16 May 2023 According to the information given, it appears that the office ceiling repair work was more of a maintenance or restoration investment than a structural upgrade or improvement. In this situation, it is likely that the charge will be recorded as a revenue expense and expensed on the income statement.

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