Accounting treatment of xbrl tool

To classify the assets as fixed asset you have to verify the following.

a) whether the benefit of the asset is accrued for a period more than 1 year.

b) Ownership of the asset.

c) Materiality.

In your case the xbrl tool might be such that you can use it only for 1 year. if such is the case then you can fully charge it to expenses.

It is software for internal use ,which is part of appendix of AS-26. APENDIX provides the illustrative application of the PRINCIPLES laid down in the STANDARD to internal use of software

13. The depreciable amount of a software should be allocated on a
systematic basis over the best estimate of its useful life. The amortisation
should commence when the software is available for use.

There is a rebuttable assumption that the estimated useful life of the software shall be 3-5 years

Edit:  systematic basis over the best estimate of its useful life and rebuttable assumption means that any period (including less than 1 year can be used for amortisation)

More detail in

/forum/details.asp?mod_id=176336&offset=1

agree with praveen

XBRL tool remain valid only for a year...hence should be charged to p&l in the same year.

Regards

Madhusudan

XBRL Tool purchased by you is valid only for a year and hence it is not to be capitalised. Praveen has given explained it precisely.

The entire amount can be written off in P&L a/c in the same year but provisions of appendix A of AS-26  will apply

Para 13 clearly states

The depreciable amount of a software should be allocated on a
systematic basis over the best estimate of its useful life. The amortisation
should commence when the software is available for use

If the useful estimated life is less than one year then it can be writenn off in same year

There is a rebuttable assumption that the estimated useful life of the software shall be 3-5 years

this is an emplied assumption unless there is something contrary like in this case

Asset is to be capitalized and written off in same year

Don't we capitalized the asset liable to 100% depriciation and writeoff within the same year?

Please clarify Where my understanding is wrong

It is w/o in same year in P& l A/c with full amount