Capitalization of the scaffolding expense


(Querist)
14 May 2019
In an hospitality industry, we are going to renovate the building facade and there will be a civil work which will be involved in the renovation. There will be scaffolding (a temporary structure) which will be installed in order for laborers to reach the 25 floored building in order to carry out the renovation work.
-- Whether the expenses incurred on scaffolding can be capitalized in the books of accounts?
-- Whether the cost incurred on scaffolding can be considered as the cost directly attributable to make the asset ready for its intended use by management as the work cannot be completed without installing scaffolding?

Notes :
1. It is a renovation project and not the Greenfield project.
2. There will not be any expansion involved in the same.


CA R SEETHARAMAN (Expert)


Click to Talk 15 May 2019
1 It can be capitalized if you are capitalizing the renovation cost.
2 The cost incurred on scaffolding can be considered as the cost directly attributable to make the asset ready for its intended use.



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