Purchase of software
This query is : Resolved
11 August 2011
Dear all,
In our company, we purchased a new software for sale and purchase department. it has been purchased for internal purpose. it is being implemented and not yet complete..the amount is more than 3 lakhs as of now. and its likely to go up. Should this be capitalised? if yes under fixed asset or intangible assets? and should it be amortised?
if not to be capitalised then which head will it come as expense?
Waiting for a reply asap...
Thanks in advance..
In our company, we purchased a new software for sale and purchase department. it has been purchased for internal purpose. it is being implemented and not yet complete..the amount is more than 3 lakhs as of now. and its likely to go up. Should this be capitalised? if yes under fixed asset or intangible assets? and should it be amortised?
if not to be capitalised then which head will it come as expense?
Waiting for a reply asap...
Thanks in advance..
13 August 2011
Software can be capitalised under fixed assets and depreciated according to the useful life of the assets
22 August 2011
thank you for ur reply....may i ask u one more doubt...so wen we depreciate this software development amount, do v take any particular rate of depreciation or do v depreciate it according to its useful life??
If useful life, how do v determine the life? is there any criteria??
If useful life, how do v determine the life? is there any criteria??
22 August 2011
Software depreciation is allowed 16.21% under Companies act(Minimum)on straight line method and 60% under Income tax act (maximum) under WDV method
But you can decide depreciation based on useful life of the asset, useful life can be decided based on engineers in particular field
But you can decide depreciation based on useful life of the asset, useful life can be decided based on engineers in particular field
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