Capitalisation of user license purchased
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
09 July 2013
Hi,
My company has purchased new ERP software. It contains user license and installation componant. The vendor bill has come in two parts.
- User license
- Installation
Please suggest me the accounting treatment whether the user license needs to be capitalised.
Thanks
Poonam
My company has purchased new ERP software. It contains user license and installation componant. The vendor bill has come in two parts.
- User license
- Installation
Please suggest me the accounting treatment whether the user license needs to be capitalised.
Thanks
Poonam
CMA Ramesh Krishnan
(Expert)
12 July 2013
Software cost and installation can be capitalised. and user license please check the validity, in case license is annual renewal then you can treat the licence amount as prepaid and charge off the whole year. if it is life time license then you can add to software cost and capitalise
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