Capitalization of assest

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 June 2013 Dear All,

Can any body tell me that if we have repaired our fursh of Plant of about Rs.1000000 then will it be capitalised in plant and machinery or not.

We haven't writeoff our plant cost for its damaged fursh.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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30 June 2013 As per AS 10 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 performance.

Querist : Anonymous

Querist : Anonymous (Querist)

30 June 2013 but its just an improvement in infrastructure so i think it should be booked as expenditure.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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30 June 2013 I dont think there will be an increase in future benefits and therefore it can be charged to profit and loss account.

Querist : Anonymous

Querist : Anonymous (Querist)

30 June 2013 oh ok ok sir,

I thing more if we had change the hard disk of our P.C then will it be capitalized.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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30 June 2013 Yes change of hard disk should be capitalized in the computer group.