CAPITALISATION OF AN ITEM
This query is : Resolved
01 March 2008
IN CASE OF AN MOVABLE VEHICLE LIKE LOCO IF ITS MOTOR IS CHANGED AND MAJOR PARTS OF ITS BODY IS ALSO REPAIRED. BUT ITS REGISTRATION NO. IS NOT CHANGED. THIS MAY RESULT IN INCREASE IN THE PREVIOUS ESTIMATED LIFE OF THE ASSET. BUT IT DOES NOT RESULT IN CHANGE IN ITS CARRYING CAPACITY. SHOULD SUCH EXPENDITURE BE CAPITALISED OR TREATED AS REVENUE EXPENDITURE?
01 March 2008
IF IT INCREASES ESTIMATED LIFE THAN SUCH EXPNDITURE SHALL BE ADDED TO WDV AND DEPRICIATION SHALL BE CHARGED ON THE NEW LIFE OF AN ASSET
01 March 2008
SUBSEQUENT EXPENDITURES RELATED TO AN ITEM OF FIXED ASSET SHOULD BE ADDED TO ITS BOOK VALUE ONLY IF THEY INCREASE THE FUTURE BENEFITS FROM THE EXISTING ASSET BEYOND ITS PREVIOUSLY ASSESSED STANDARD OF PERFOMANCES & IN INCREASED IN ESTIMATED LIFE. SO IN YOUR CASE YOU CAN CAPITALISED THE AMOUNT IF IT IS SATISFYING THE ABOVE CONDITIONS.
03 March 2008
If any expenditure on the existing assets increase the life of the asset then it should be capitalised.
In ur question, the expediture on its motor may be capitalised, but the repairs of body part should be charged to revenue.
In ur question, the expediture on its motor may be capitalised, but the repairs of body part should be charged to revenue.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Reopen of assessment proceeding
- TDS on Consultancy- Non DTAA
- Depreciation of fixed assets- coop housing society in mumbai
- COMMERCIAL INVOICE FOR MATERIAL AND FREIGHT
- Reprocessing of rectification order AY 2025-26
- FTS Taxable under 115A
- Gift Received from nonblood relative
- EXPORT BILL UNDER LUT FREIGHT CHARGE INCLUED IN INVOICE IT LIABLE TO TAX
- Rental income gst and it purpose
- Tax Audit u/s 44AB for Transport Business A proprietorship is engaged in transportation business and
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
