Expense heads for a bed & breakfast

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For a bed and breakfast business, food purchased for guest breakfast is a direct food expense. Kitchen utensils, crockery, and cutlery are generally treated as consumables if short-lived. Soft furnishings such as mattresses, sheets, and curtains are typically capitalized as furniture or furnishings.

kakoli banerjee

kakoli banerjee (Querist)
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16 December 2011 Dear expert,
I have a new client which is an LLP company and they have license to run a Bed & Breakfast place. They do not run a restaurant. Please advise under which heads will the following expenses be covered:
1. Purchase of food items for Guest Breakfast
2. Kitchen utensils, crockery & cutlery
3. Soft furnishings (mattress, sheets, curtains etc.)

CA Abhishek Rana

CA Abhishek Rana (Expert)
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17 December 2011 Dear Kakoli,

1. Food items purchased shall be booked as food expenses under direct expenses.

2. Kitchen utensils etc. shall be booked as consumables as expected life is less than 1 year.

3. Soft furnishings is a part of furniture and should be capitalized.

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