Capital or Revenue Exp.

This query is : Resolved

Pawan Mittal (Querist)
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24 March 2008 In the case of software company. They spend 5.00 cr towards salary to IT staff but software could be made in the previous year.Therefore, no sale during the year.
Should company claim loss
or
should paid amount is WIP
or
Defered Expenses

what is correct treatment of exp.

Vikas Garg

Vikas Garg (Expert)
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24 March 2008 The salary expenses should be directly charged to P & L account as the company is a software developing company and the software development is done in the normal course o the business of the company. It does not matter whther the software was fully developed in that year or not. So, charge it off.

Pawan Mittal

Pawan Mittal (Querist)
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24 March 2008 can we consider as WIP
or
Defered Expenses

Pawan Mittal

Pawan Mittal (Querist)
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24 March 2008 can we consider as WIP
or
Defered Expenses

CA Saurabh Maheshwari

CA Saurabh Maheshwari (Expert)
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24 March 2008 CHARGE TO PROFIT AND LOSS ACCOUNT

CA Praveen Chopra

CA Praveen Chopra (Expert)
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24 March 2008 Mr.Mittal,there is no question of WIP as no work is going on right now.The work of developing this particular software has come to an end as you told that software could not be developed. So it should be directly charged to profit & loss account rather.

MANAS ROUT

MANAS ROUT (Expert)
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24 March 2008 YOU HAVE TO CHARGE DIRECTLY TO P& L ACCOUNT FOR THAT YEAR.

CA Kamlesh Dama

CA Kamlesh Dama (Expert)
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24 March 2008 charged to the P&L

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