Vehicle Insurance capitalized or not ?
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
24 November 2010
Hi,
My Query is:
Assessee has purchased vehicle during the year. The invoice is inclusive of insurance cost for the initial year.
(a) Whether the same is to be capitalized along with the vehicle or to be expensed off? If to be capitalized what about prepaid?
(b) Whether the treatment will be different if the same is not included in the invoice but taken separately before the vehicle is put to use?
I am aware that subsequent year insurance premium paid for the FA is to be expensed off.
Kindly clarify asap.
Thanks in advance
My Query is:
Assessee has purchased vehicle during the year. The invoice is inclusive of insurance cost for the initial year.
(a) Whether the same is to be capitalized along with the vehicle or to be expensed off? If to be capitalized what about prepaid?
(b) Whether the treatment will be different if the same is not included in the invoice but taken separately before the vehicle is put to use?
I am aware that subsequent year insurance premium paid for the FA is to be expensed off.
Kindly clarify asap.
Thanks in advance
24 November 2010
first time insurance would be capitalized since its included in bill of vehicle....after that expenses wold be treated as revenue expenses
24 November 2010
All exps at the time of purchase of car to be capitlized.
after capitlized no need to prepaid exps.of insurance. be cause its capitlized. not exps.
after capitlized no need to prepaid exps.of insurance. be cause its capitlized. not exps.
24 November 2010
Agreed
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