Capitalization of software license
This query is : Resolved
20 February 2022
The Company has entered into a 5-year contract for use of software. The Cost for the same is Rs. 10 crores.
But the payment will be made in equal instalments over 5 years.
Whether the company can capitalize the cost of Rs. 10 crores in 1st year and amortize the same in 5 years?
But the payment will be made in equal instalments over 5 years.
Whether the company can capitalize the cost of Rs. 10 crores in 1st year and amortize the same in 5 years?
20 February 2022
No need for capitalisation as payment is made in equal installments.
Charge it on payment yearly.
Charge it on payment yearly.
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