Project Accounting

This query is : Resolved

Guest

Guest (Querist)

14 April 2011 Suppose a company (X&co.)gets a government project for education in the whole sector of schools in the a particular state. The project is of 3-4 years. There is capital expenditure and revenue expenditure in the project. Capital expenditure - purchase of computers, printers etc. for the school.

Query - This computers etc. (capital expenditure) purchased. What will be the entry passed in the books of company (X&co.).

Option 1) will it be treated as Fixed Assets and depreciation claimed for the three - four years (life of project). And then when the whole project is over, will it be taken as purchases(trading a/c.)?

or Option 2) Will it be treated the whole as purchases (project exps.) (trading a/c.) i.e. Project exps. a/c debited and Work-in-Progress a/c credited.

Kindly please answer. Also please give reference to the Accounting standard or Guidance Note.

Maninder Jain

Maninder Jain (Expert)
Follow

15 April 2011 Since the benefit of compuers, chairs, table will extend beyonf one year, i suggest you to capitalise the capital expenditure & claim depreciation benefit on it.

Later when the project is over, the assets can be sold & differnce in WDV & sale price can be treated as profit/loss in books.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Jeegar Valera

Dhananjay Patil

Manik Anant Kale

nandeesh mashyal

Vinod Selv

Subscribe Now

Project Accounting

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA