how to capitalize office renovation work ?

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MOIN MANSURI (Querist)

24 February 2017 dear experts recenty we are renovate our office and create some extra cabin also..and some labour bill also including in this works. my quiry is can we allow to used this exp to capitalize? if yes than under which head we show to assets ? can we used also labour exp to capitalize..?

CA DHAVAL MISTRY

CA DHAVAL MISTRY (Expert)

24 February 2017 An expenditure can be capitalised if the expenditure incurred tends to increase the useful life or asset or extension of the asset. In your case, you have created extra cabin. If the cabin is made of civil construction, it falls a part of office premises and if the same is made of wooden / aluminium structure, it will fall under furniture & fixtures. Along with material, labour expenses also to be capitalised. However, please keep in mind, you can claim depreciation only when the asset is put to use.

Thanks

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)

24 February 2017 Capitalise under furniture and fixture renovation and adding if cabins.

CA DHAVAL MISTRY

CA DHAVAL MISTRY (Expert)

24 February 2017 If new cabins contains civil work, it has to be capitalised in office premise (fixed asset) account. If new cabins are just wooden cabins, you can capitalised that to furniture & fixture account.

MOIN MANSURI

MOIN MANSURI (Querist)

24 February 2017 thanks for solved the problems

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