CAPITAL / REVENUE EXPENDITURE

This query is : Resolved

Ca Vaneet Gupta (Querist)
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17 December 2008 Dear all
My company has purchased a new car and insurance charges for one year has been paid to vendor at the time of purchase. i want to know whether such charges will be capitalsed or not? please suggest the treatment ASAP.

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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17 December 2008 Insurance premium paid at the time of purchase of car is capital expenditure.

Ravikumar.G

Ravikumar.G (Expert)
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17 December 2008 Included in capital expenditures are amounts spent on:

acquiring fixed assets

fixing problems with an asset that existed prior to acquisition

preparing an asset to be used in business

legal costs of establishing or maintaining one's right of ownership in a piece of property

restoring property or adapting it to a new or different use

starting a new business

Hence, Insurance paid by you is a capital expenditure.

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