Fixed asset procure for replacement
This query is : Resolved
Akash Unadkat
(Querist)
23 November 2014
If i Buy a New Plant & Machinery / Furniture / Office Equipment, I Buy it NEW and pay amount of it.
But above New PROCUREMENT is actually REPLACEMENT of an OLD that Item.
[Suppose, IF i had 20 years old CNC Machine, now its Not Working and its life of working is over, and i Buy NEW in REPLACE of that]
now my QUESTION is What is Accounting Treatment ??
to Capitalise above [due to its life is more than one year] ???
or Book it as Expense [due to replacement of an old] ??
- AKASH UNADKAT
But above New PROCUREMENT is actually REPLACEMENT of an OLD that Item.
[Suppose, IF i had 20 years old CNC Machine, now its Not Working and its life of working is over, and i Buy NEW in REPLACE of that]
now my QUESTION is What is Accounting Treatment ??
to Capitalise above [due to its life is more than one year] ???
or Book it as Expense [due to replacement of an old] ??
- AKASH UNADKAT
Amol S Joglekar
(Expert)
23 November 2014
Capitalise it.
A block of asset concept has been introduced. This new machine will fall in the same block as that of the earlier one.
A block of asset concept has been introduced. This new machine will fall in the same block as that of the earlier one.
Rupesh Jain
(Expert)
25 November 2014
you have to capitalized the assets under the income tax act you have the block of this assets and add the value in this block when you sold the old assets then you have to deduct the value with the sales price
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