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treatment of software purchased

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(Querist)
14 May 2008 a courier company purchases software for its business operations. Should the software be capitalized or charged to revenue?...also can purchase of computer peripherals be considered as revenue expenditure?
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Amit Sharma

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Amit Sharma (Expert)
14 May 2008 Dear Manoj,

You need to be a little more specific as this is a very sensitive area. It depends upon alot of things. If you could be more specific on the nature of the product amount paid, estimated time for usage of product.
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Manoj RB

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Manoj RB (Querist)
14 May 2008 Dear amit,

I hope the following info will fetch me a good answer from u...

purpose of the software : to assist in mainstream business operations
cost of the software: more than 10 lakhs..
nature of the software: customized to the requirements of the company
life of the software: around 4 to 5 years..
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CA Hemant T Dewani

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CA Hemant T Dewani (Expert)
14 May 2008 software cost will be inclded in coputer a/c & dep is chareged at the rate of 60% when you will update the same every year then it is revenue exp
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