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Accounting treatment for tally purchase software

Others 34581 views 16 replies

hemanth hemu

18 Points Posted on 25 March 2019

what is the entry & accounting treatment for tally purchase software (license valid for 1yr)???

Replies (16)

Quick Summary

Tally software with 1-year license can be treated either as software expense (revenue expenditure) or intangible asset depending on accounting policy. Many treat it as prepaid/software expense and amortize over the license period, while some classify it as intangible fixed asset.

Chinmayee Khale

Senior Associate

52 Points Posted on 25 March 2019

Since the usage is not more than 12 months, you need not capitalise it. Directly expense off in expenses.

Software Expenses Dr.

To Vendor

hemanth hemu

18 Points Posted on 25 March 2019

thank you...but how can we treat this as expense becoz after 1yr it that to renew & software purchase not for the purpose of sale???

RAJA P M

"Do the Right Thing...!!!"

128152 Points Posted on 25 March 2019

You can account the "Tally Software" under fixed asset.

Jatin

Accountant

3479 Points Posted on 26 March 2019

Treat expense for purchase of tally software, make following entries

At a time of purchase software if you purchase software after 1st April

Dr. Software Expenses
Dr. Prepaid Expenses (unexpired portion)

Cr. Vendor A/c

Next year

Dr Software expenses
Cr Prepaid expense

RAJA P M

"Do the Right Thing...!!!"

128152 Points Posted on 26 March 2019

Dear All...

Why it's to expenditure head..?
Why not under Asset head...?

hemanth hemu

18 Points Posted on 26 March 2019

🤔🤔🤔🤔

RAJA P M

"Do the Right Thing...!!!"

128152 Points Posted on 26 March 2019

Dear Hemanth.,

Tally Software is one of Fixed Asset. You can book it under FA with full value. No more restrictions...

hemanth hemu

18 Points Posted on 26 March 2019

everyone having different opinion... I'm confused wt to do😅😅

Jatin

Accountant

3479 Points Posted on 26 March 2019

How can treat tally software as fixed assets

licence of intellectual Property Rights (Tally Software) for 1 year not a fixed assets

in my opinion, treat expenses (You need to renew every year)

RAJA P M

"Do the Right Thing...!!!"

128152 Points Posted on 26 March 2019

Renewal of TSS will be accountable in to expenditure...

But, Software is under fixed asset...

Check out this point to anywhere...

Kalyani

Chartered Accountant

181 Points Posted on 29 March 2019

Agree with RAJA P M sir, treat it as Intangible asset.

Varsha Kushwaha

counselor

22 Points Posted on 17 August 2019

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SUSHIL PANCHAL

25 Points Posted on 16 October 2019

If i purchase tally software on 16-10-2019, then as per AS-10, it falls in the two accounting period, it means its treated as fixed asset.

Марьяна Литовченко

4 Points Posted on 15 March 2021

Originally posted by : hemanth hemu
	what is the entry & accounting treatment for tally purchase software (license valid for 1yr) personal tax advisor near me