PURCHASE OF ANTI VIRUS

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Devendra (Querist)
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12 June 2011 M/S XYZ, a Pvt. Ltd. Co. purchases a Quick Heal Anti-virus of 3 years. Whether to be capitalized (ie. amortized in 3 years) or to be debited to P&L A/c?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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12 June 2011

You can debit the expenses to P&L A/c in respect of the software as in the next two years , you may feel difficult to prove this expenditure, in the absence of any explanatory provision of amortization.
Certain revenue expenditure may give enduring benefits, also so please debit it to Expenses head.

CA Suresh Jain

CA Suresh Jain (Expert)
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12 June 2011 Debit 1/3rd to Expense Account and 2/3rd to "Prepaid Expenses Account" which is to be debited to Expenses in the relevant year

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