Is this capital & revenue expenditure?? reply soon

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Mayank Bhatnagar (Querist)

10 April 2016 Hi,
Actually i was doing an audit of bank,
They have done some expense on installing server system, and also some wiring, tape, & other tools used
So is tape used will be capitalised or not?

My secnd querry is that they had a door without hings which they have used earlier , they purchases hings of ₹100, and they install that door, and claiming hings as assets.
Is it really assets???

Reply me soon....

Amol S Joglekar

Amol S Joglekar (Expert)

10 April 2016 01. If the same are incurred for the first time, it will be capitalised. For the subsequent year's expenses, the same shall be revenue expenditure in the nature of repair and maintenance.
02. The door without HINGES?.....?? Anyway, as you say..... If the cost of the hinges is incurred in the subsequent year, may go to revenue expenditure considering the quantum of expenditure AND there is no any material change in the usability of the door.

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Mayank Bhatnagar

Mayank Bhatnagar (Querist)

14 September 2016 Thanks for the reply, actully i was of the same opinion but some of my knowing took it as capital expenditure...anyways thanks

Amol S Joglekar

Amol S Joglekar (Expert)

14 September 2016 you are most welcome.

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