Capital expenditure to construct a floor in ancestral house.
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
18 June 2016
We as a nuclear family is residing in an ancestral home. As our family grows we have constructed a additional floor on this property for living. Me, my father and my mother has contributed the capital to construct this additional floor. My query is that as this is a very huge expenditure, could me, my father and my mother can debit our personal capital accounts to show this expenditure as the title of this property does not belong to us but to my deceased great grandfather and the asset created out of this expenditure will not reflect in our balance sheets. If not, then what would be the treatment of this expenditure.
CA R SEETHARAMAN
(Expert)
18 June 2016
As you are the legal heir's of the property you can capitalize the expenditure in the respective balance sheets.
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