depreciation on Industrial License

This query is : Resolved

deep (Querist)
Follow

05 April 2008 The company acquired industrial license from Govt to produce certain commodities. How to depreciates / amortised the license amount as there is no specific usage period. There is no specific rates in schedule XIV. Cost of License is in Lacs

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
Follow

08 April 2008 How did the licence aquire cost?

deep

deep (Querist)
Follow

09 April 2008 It's in Several Lacs

deep

deep (Querist)
Follow

13 May 2008 The company acquired industrial license from Govt to produce certain commodities. How to depreciates / amortised the license amount as there is no specific usage period. There is no specific rates in schedule XIV. Cost of License is in Lacs

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
Follow

26 January 2009 Generally there will not be any charge for issue of licence. If you have spent on administration or prepartion of application or survey that becomes your operating expenses.

On the other hand if you have paid any licence fee to the government and have receipt stating the licence fee then the value should be amortised based on the estimated no. of years you can utilsie the licence. If no particular years of validity is there, depending on managment perception the benefit for the number of years to be utilised has to be arrived at.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now