CAPITALIZATION OF AMT PAID TO MSEB

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santosh (Querist)
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16 November 2008 Dear All,

Pl. clarify :

Whether the amt paid to MSEB for sanction of additional power supply (other than deposit) should be capitalized ?

CA.PRAMOD KUMAR PANDA

CA.PRAMOD KUMAR PANDA (Expert)
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16 November 2008 Yes. Such deposits for drawing additional power from the Grid of SEB is refundable. If the deposits are in the nature of Security Deposits and to be shown as Current Assets.But if its in the nature of additional fee to be paid for additional power supply, the same can be capitalised along with the cost of Electrification and installation.

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
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17 November 2008 The refundable amount paid as Security Deposit, if any should be shown as Loan and Advance Recoverable in cash or kind and non refundable portion may be written off to P&L Account as a revenue expenditure.

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