Treatment of computer software
This query is : Resolved
CA Shanti Deshwal
(Querist)
25 April 2009
Sir,
One of my client has purchased imported software in 8000 Euro whcih shall be paid in 36 installments and the ownership will be passed only after paying of all installment.
what will be the treatment like :
a) Recognise the software as Fixed assets and claim depn .
b) Claim as the revenue expenditure as and when we are paying the installments.
Thanking You
CA Shanti Lal Deshwal
One of my client has purchased imported software in 8000 Euro whcih shall be paid in 36 installments and the ownership will be passed only after paying of all installment.
what will be the treatment like :
a) Recognise the software as Fixed assets and claim depn .
b) Claim as the revenue expenditure as and when we are paying the installments.
Thanking You
CA Shanti Lal Deshwal
CA. B.SRINIVASULU
(Expert)
25 April 2009
Treat the software as fixed asset purchased.
Then treat the cost of asset as loan received from supplier.
Charge depreciation for the asset.
Whenever you are making payment then reduce the loan content.
If by chance the company has failed to make the payment and software person has taken back his software. At that time you should treat it as sale of asset and the loss or profit at that time should be booked in the books.
Then treat the cost of asset as loan received from supplier.
Charge depreciation for the asset.
Whenever you are making payment then reduce the loan content.
If by chance the company has failed to make the payment and software person has taken back his software. At that time you should treat it as sale of asset and the loss or profit at that time should be booked in the books.
CA.Tarun Maheshwari
(Expert)
25 April 2009
Agree with the expert.
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