If the Battery is part of any machinery or it is purchased to obtain extra benefit from machine, then it will be capitalised with that particular asset.
10 July 2008
If after purchasing of any fixed assets, any type of expenses incurred to increased their capacity, so this expenses will be capitalized (debit to such fixed asset account). But in your case batery purchased for machinery to operate machine. Through this exps. capacity of machine will not be increased, so this should be revanued. Online account teacher Jay Gulani.
27 April 2009
The basic intent of the law is that is the purchase of a capital assets is to replace any part of the exiting fixed assets to work smoothly and effectively, and the purchase of such assets do not enhance the capacity of the existing machine, the new assets can be charged to P & L Account. In Income tax also the same logic applies. However in this query if the cost is since > 5K, the battery needs to be capitalized if this is a separate assets independent of any existing assets.
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