Fixed assets capitalisation
This query is : Resolved
07 January 2015
Whether administrative expenses incurred for construction of a mall building can be capitalized in Fixed assets? if yes then give me some administrative expenses examples and if No why?
07 January 2015
In accordance with the accounting principles laid down in AS 10,
1. These administrative expenses incurred during the construction of the project should be capitalized if these are directly attributable to the construction of the fixed asset or to bring assets to its working condition for intended use.
2. If these expenses are not directly attributable to the construction of the project or directly attributable to fixed assets to bring assets to its working condition for its intended use, these expenses should be charged to statement of profit and loss in the period in which the expenses are incurred.
1. These administrative expenses incurred during the construction of the project should be capitalized if these are directly attributable to the construction of the fixed asset or to bring assets to its working condition for intended use.
2. If these expenses are not directly attributable to the construction of the project or directly attributable to fixed assets to bring assets to its working condition for its intended use, these expenses should be charged to statement of profit and loss in the period in which the expenses are incurred.
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07 January 2015
thank u sir for that but i do came across that but give me certain examples that are administrative expenses related to construction that can be capitalized for fixed assets
07 January 2015
Salary, travelling etc of employees as well as other expenses like courier, stationary, rent of office premises, etc
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07 January 2015
thank u sir
Plz tell me the basis for capitalizing the salaries to fixed assets
Plz tell me the basis for capitalizing the salaries to fixed assets
07 January 2015
Base on employee time spent on project.
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