Capitalization of material
This query is : Resolved
17 November 2011
I have one machinery which i had capitalized earlier for which i had replaced one part of it amounting to Rs. 50000/- should i capitalize this amount or should i book this as expenses as repairs to machine anyone can help me out?
17 November 2011
It depends upon utility of that part.
If that part is useful to your machinery and increase its useful life than only need to capitalise else it will be charged as revenue expenditure.
If that part is useful to your machinery and increase its useful life than only need to capitalise else it will be charged as revenue expenditure.
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