Nature of expenditure?

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vishnupriya (Querist)
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04 June 2012 TTD, Tirupati has lots of gardens in which flowers are grown and sent to Lord Balaji for daily rituals. No other sale is made out of that garden. Garden dept in TTD is a cost centre.

Now when new plants are planted in those gardens..what is the nature of expenditure? Whether it falls in capital or revenue?

What more types of expenditure will be of capital nature that can be used in gardens?

Please clarify in relevance to accounting standards.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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05 June 2012 Capital expenditure,which the benefit of that expenditure will be received more then one year.

But accounting standard not apply on forest & plantations works , natural resources.

My view it can be treated as Revenue expenditure and written off the same financial year.

vishnupriya

vishnupriya (Querist)
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06 June 2012 Sir
Thankyou for reply
But there is IAS 41 for accounting Agriculture activity. Even though IAS 41 is not yet applicable in India can we rely on those principles laid in IAS 41. Will the plantation in gardens fall within scope of IAS 41?

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