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Replacement of Existing Motor during the Useful Life

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(Querist)
03 March 2020 Client has some AHU motors which is recently purchase 3 years back, wanted to replace the same Motors with motor consume 50% less energy.
Old motor would have useful life for 10 Years.

Should this be capitalized or consider as replacement and charge to revenue?
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Rahul Chauhan

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Rahul Chauhan (Querist)
04 March 2020 Hi.. Please help if anybody can add comments
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Kamal Kant Mittal

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Kamal Kant Mittal (Expert)
09 March 2020 Hi, I believe it should be capitalised as the new motor is consuming 50% less energy, hence indirectly putting new motor instead of old one will provide extra future economic benefit to the company.

Regards
CA Kamal Kant
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