Fixed asset capitalization

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Querist : Anonymous

Querist : Anonymous (Querist)

21 July 2015 i have query regarding fixed asset capitalization. i am working in mnc company.
my company is newly established . one machine which is already capitalized im march-15 having huge value and now 1 crore expenditure incurred before starting production so expenditure incurred after capitalization what treatment i need to give regarding expenditure which is incurred after capitalization.

B.COM, ACA, DISA Namrata

B.COM, ACA, DISA Namrata (Expert)

21 July 2015 Capital expenditure includes costs incurred on the acquisition of a fixed asset and any subsequent expenditure that increases the earning capacity of an existing fixed asset. You have to capitalize the expense incurred subsequently also provided it is not related to just regular maintenance of the asset. If the expenditure increases the earning capacity of the existing asset go ahead and capitalize it.

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Querist : Anonymous

Querist : Anonymous (Querist)

22 July 2015 thank you..................

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