Capitalisation of feasibility study
This query is : Resolved
01 October 2009
The company has conducted a feasibility study for upgradation of the plant capacity from ABC vendor. For commercial benefits,the company has tied up with another vendor XYZ for carrying out the the upgradation process. However, the company has decided to defer the upgradation by another year. There has been a purchase of a blendling line made from vendor XYZ to facilitate the transfer of a higher capacity. Can the cost of feasibility study paid to Vendor ABC be capitalised alongwith the blending line or else as a technical know how under Intangible assets?
05 October 2009
In my opinion, such costs can be capitalised as directly attributable cost for bringing the asset to its intended use.
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