Accounting treatment for tally purchase software


hemanth hemu   25 March 2019

hemanth hemu

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

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Chinmayee Khale (Senior Associate)     25 March 2019

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

Software Expenses      Dr.

    To Vendor

 

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hemanth hemu   25 March 2019

hemanth hemu

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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???

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RAJA P M ("Do the Right Thing...!!!")     25 March 2019

RAJA P M
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You can account the "Tally Software" under fixed asset.

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Jatin (Accountant)     26 March 2019

Jatin
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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

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RAJA P M ("Do the Right Thing...!!!")     26 March 2019

RAJA P M
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Dear All...

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

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hemanth hemu   26 March 2019

hemanth hemu

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🤔🤔🤔🤔

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RAJA P M ("Do the Right Thing...!!!")     26 March 2019

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Dear Hemanth.,

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

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hemanth hemu   26 March 2019

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

Jatin (Accountant)     26 March 2019

Jatin
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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)


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