banner_ad

Capitalization of extended warranty charges

This query is : Resolved 

07 September 2011 Hi

We have purchased computers on a theree year warraty and the total cost incurred is capitalized at the time of acquition. After 3 mnoths of capitalization, we have taken additional warranty for one more year and we have paid Rs. 741216 towards extended warranty. Whether these charges to be capitalized or expensed?

20 September 2011 Only those expenses are to be capitalized which increase the performance or the output or productivity of the asset.

Extended warranty does neither of the above. Accordingly, it will be treated as a revenue expenditure.

03 October 2011 i agrees with the expert


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


CCI Pro

Similar Resolved Queries


loading


Unanswered Queries



CCI Pro
Meet our CAclubindia PRO Members

Follow us
add to google news



Answer Query



Company
23 May 2026
Account Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
26 May 2026
Audit executive

vdsr & co LLP

Chennai

CA Inter

View Details
Company
16 May 2026
Account & Audit Asst

RAHUL KHANDEBHARAD & ASSOCIATES

Nashik

B.Com

View Details
Company
29 May 2026
Finance Head

Bhawar Sales Corporation

Chennai

Graduate (Any)

View Details
Company
ARTICLESHIP 31 May 2026
Article Assistant

KPRS And Associates

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 14 May 2026
CA ARTICLE

PRAVEEN GARG & CO

Faridabad

CA Foundation

View Details
Company
08 May 2026
CHARTERED ACCOUNTANT

SHAH LADHA AND ASSOCIATE

Ahmedabad

CA

View Details
Company
22 May 2026
Audit assistant

Displayandbeyond

Mumbai

CA

View Details