Purchase of user licence for operating a software
This query is : Resolved
09 July 2013
Hi,
Please suggest whether Purchase of user licence for operating ERP needs to be capitalised as intangible asset in the books of account as per AS-26 or expensed off in the year of purchase?
Thanks
Poonam
Please suggest whether Purchase of user licence for operating ERP needs to be capitalised as intangible asset in the books of account as per AS-26 or expensed off in the year of purchase?
Thanks
Poonam
09 July 2013
For accounting purpose:-
upgradation of software , purchase of licences and purchase of computer software are intangeble assets,
therefore, expenditure incurred on purchase of software/upgradation software should have been capitalised and amortised over their estimated useful life as per AS 26,
Reference
opinion given by icai commitee
https://220.227.161.86/eac/eacfinal/vol26/2.htm
Thanks & regards
Ganesh babu k
upgradation of software , purchase of licences and purchase of computer software are intangeble assets,
therefore, expenditure incurred on purchase of software/upgradation software should have been capitalised and amortised over their estimated useful life as per AS 26,
Reference
opinion given by icai commitee
https://220.227.161.86/eac/eacfinal/vol26/2.htm
Thanks & regards
Ganesh babu k
Message likes :
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09 July 2013
For income tax purpose treat it as revenue expenditure:-
Citation:-
a)CIT Vs Southern Roadways Ltd.(2008)304ITR 8
4(Mad)
b)CIT Vs Asahi India Safety glass Ltd.(2011)Del.
Thanks & regards
Ganesh babu k
Citation:-
a)CIT Vs Southern Roadways Ltd.(2008)304ITR 8
4(Mad)
b)CIT Vs Asahi India Safety glass Ltd.(2011)Del.
Thanks & regards
Ganesh babu k
10 July 2013
It is to be treated as revenue exp.
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