Replacement of Battries
This query is : Resolved
12 March 2009
Please clarify this
while shifting to another location a software company replaces 158 batteries for its UPS and enitre cost is expenses off. And it is accounted as Shifting expenses.
My doubt is the expense needs to be capitalised as all the batteries are replaced if not it should be accounted as repairs and maintenance-machiner
while shifting to another location a software company replaces 158 batteries for its UPS and enitre cost is expenses off. And it is accounted as Shifting expenses.
My doubt is the expense needs to be capitalised as all the batteries are replaced if not it should be accounted as repairs and maintenance-machiner
12 March 2009
it cant be capitalized.
HUZAIFA HUSSAIN
(Expert)
12 March 2009
HI
SINCE THE LIFE OF UPS IS ENHANCED BECAUSE OF REPLACEMENT OF BATTERIES IT AMOUNTS TO APPRECIATION OF ASSETS AND HENCE IT SHOULD BE CAPITALISED.
SINCE THE LIFE OF UPS IS ENHANCED BECAUSE OF REPLACEMENT OF BATTERIES IT AMOUNTS TO APPRECIATION OF ASSETS AND HENCE IT SHOULD BE CAPITALISED.
12 March 2009
UPS- Uninterrupted Power Supply is combination of inverter an rectifier, and battery unit now the replacement of battery does not increase the life of the UPS in real terms. its need to run it so i think its revenue expenditure or deffered but not capital exp. even with replacement of batteries UPS is going to perform the same function there is no value addition to it?? so i think it should not be capitalized.
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