Classification & Depreciation Rate

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CMA.Baskar.V

CMA.Baskar.V (Querist)

08 May 2010 In our company we are implemented SAP software and for that implementation we spend lot of amount in different category, for example software purchase, license fee, implementation professional charges including Travel & conveyance paid to implementation team. It's cost around Rs.1.75 cores.
My question is:
1. While capitalizing SAP implementation expenses, under what asset class I need to take (Computer Software / intangible asset)?
2. What depreciation rate applicable as per company act?
Please help anyone and thanks in advance for quick response.
With regards,
Baskar.V

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

08 May 2010 With reference to the AS-26,As SAP softwares are Internally generated identifiable intangible asset

And Intangible Asset under AS-26 need to be amortized on systematic basis over the best estimates of its useful life

CMA.Baskar.V

CMA.Baskar.V (Querist)

08 May 2010 But, software purchase from outside and only customized according to our requirement.

Then, whether it will come preview of internally generated asset.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

08 May 2010 if you are purchasing like other readymade software your point is correct but SAP like software normally not readymade.only licence and hardware canbe purchased but total software need to provided customer specific and once the software devolped for your company the same cannot be used for other company.so it is purely internally generated intangible asset only. Other experts reply also solicited

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