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Fixed Asset

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(Querist)
08 April 2008 In replacement of old water treatment plant, installation of new plant is going on, in this process, some expenses (150000) was incurred on dismantling of old plant.

My question is that whether dismantling charges will be charged -

To profit& Loss Account as expenses
or reduce the disposal value of old plant and accordingly profit and loss will be calcualated on sale of disposal of old plant.
or debited into the cost of new plant and accordingly shown in the fixed asset
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S.Srinivasaraghavan

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S.Srinivasaraghavan (Expert)
08 April 2008 The cost of dismantling will be reduced from the realisation value, being incidental to disposal.
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R.V.RAO

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R.V.RAO (Expert)
08 April 2008 I AGREE WITH SRI SRINIVASA RAGHAVAN AND STATE THAT THE DISMANTLING EXP. BE REDUCED FROM OUT OF THE REALISABLE VALUE IF ANY OF OLD PLANT.
DISMATLING EXP. WILL FORM PART OF THE CALCULATION OF LOSS OR PROFIT ON DISPOSAL OF OLD PLANT.
R.V.RAO
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