Treatment of fuel and maintenance of generator used of construction of Capital Asset.
This query is : Resolved
Saikumar Rayala
(Querist)
27 September 2022
Best way to ask my question is through an example
Scenario-1 Let Abc is company which is constructing a building and it is using generator(owned by Abc) for the construction as part of using generator for construction it incurred expenses like fuel and regular maintenance,
question is should I capitalize these expenses since they are incurred for building or should I need to debit to P&L account ?
Secnario-2 what if generator is taken under operating lease ?
Scenario-1 Let Abc is company which is constructing a building and it is using generator(owned by Abc) for the construction as part of using generator for construction it incurred expenses like fuel and regular maintenance,
question is should I capitalize these expenses since they are incurred for building or should I need to debit to P&L account ?
Secnario-2 what if generator is taken under operating lease ?
CA R SEETHARAMAN
(Expert)
28 September 2022
1 Capitalise these expenses since they are incurred for building.
2 Then also capitalise.
2 Then also capitalise.
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