Cost of car purchased

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Mikdad Merchant (Querist)
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18 October 2013 My question is for both accounting and income tax purposes.

A car was purchased and insurance was paid for the car will the same form part of the cost of the asset for both accounts and for income tax purposes.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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18 October 2013 First insurance paid for purchase of Car will be form part of Cost of fixed asset. without first insurance you cannot purchase the car, so it is treated as asset cost. further renewal premium can be treated as maintenance cost