Consultancy charges towards installation work of air cooling

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CA MONIKA GOENKA (Querist)
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04 June 2012 the case is the installation of air cooling in the building for which services was provided by the consultant for the installation of the same.whether the amount has to be dr. under professional fees or building WIP?

Ca Anand Dubey

Ca Anand Dubey (Expert)
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04 June 2012 You can capitalise it by debiting respective assets ( air cooling system )

CA MONIKA GOENKA

CA MONIKA GOENKA (Querist)
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04 June 2012 but here it is dr. under building wip as no such account of air cooling system is there-whether it is allowable??

Ca Anand Dubey

Ca Anand Dubey (Expert)
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04 June 2012 Its clear that it will be capitalised and depreciation will be calculated. Now the head is problem if you capitalise under building the depreciation will be less than plant and machinery. If there is no head you can create a new head and if not possible then keep it under building

CA MONIKA GOENKA

CA MONIKA GOENKA (Querist)
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04 June 2012 but sir I have a Question that if all the amount is capitalise regarding consultancy services than what about TDS?

CA MONIKA GOENKA

CA MONIKA GOENKA (Querist)
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04 June 2012 but sir I have a Question that if all the amount is capitalise regarding consultancy services than what about TDS?

Sanjay Chauhan (IFRS)

Sanjay Chauhan (IFRS) (Expert)
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04 June 2012 Accounting entry for COnsultancy Charges for Capitalisation is as follwos:

CWIP / Office Equipments Dr ..xx
To TDS payable Cr xx
To Party Account Cr xx

Party A/c Dr xx
TDS payable A/c Dr xx
To Bank Cr xx

Thus TDS account is not affected by the capitalisation entry and you deposit TDS in the bank on the due date.

CA MONIKA GOENKA

CA MONIKA GOENKA (Querist)
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05 June 2012 thanks sir

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