Capitalisation of First insurance

This query is : Resolved

Abhishek (Querist)
Follow

18 October 2007 It has been usualy seen that people capitalize the first insurance of any capital asset along with it's cost...is it correct??...what i feel is that it is a period cost as it expires after the period in which it was capitalised and so it should be charged as revenue instead...what the experts say??

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
Follow

18 October 2007 You r right that its a period cost, but as per law if insurance is compulsory to run the capital asset then its a capital cost in first year of its running.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok