treatment of insurance on new car

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Gaurav Jain (Querist)
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14 June 2008 what is the tratment of insurance on a new car purchased during the year?

whether the same is to be capitalised or treated as revenue exp.

if to be capitalised then plase state reason?

gaurav jain

Nilesh Damji Chheda

Nilesh Damji Chheda (Expert)
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14 June 2008 hi guarav

any expenses paid at the time of purchase of car the same has to be capitalised. insurance , taxes etc paid at the time of purchase has to be capitalised. As per AS - 10 : Accounting for Fixed Assets issued bi ICAI any expense incurred to bring the assets to its present location has to be capitalised

Azmathullah Khan

Azmathullah Khan (Expert)
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14 June 2008 As per AS - 10, any expenses incurred at the time of purchasing the assets should be capitilised.

Hence Ins., RTA, Fitness, extra fitting, should be capitalised

Gaurav Jain

Gaurav Jain (Querist)
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14 June 2008 but insurance is a exp. which we have to bear each year
so its in nature of revene

Shekar

Shekar (Expert)
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16 June 2008 Only for first year it should be capitalised..from second year it can charged to p& l a/c

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