Acct Treatment for Inspection cost of New Machine

Dear all,

               Company  incurred Travelling expenses(foreign) for inspection of machine to be purchased. Plz advice me wheather this cost to be capitalised or not.?

                    

Regards,

Suvendu

Replies (6)

All Direct Expenses incurred in connection with Bringing of machinery which includes Inspection and Testing charges .so this expenditure on travel for Inspection charges can be capitalised

What would be if the expenses is incurred before purchase..?

I dont find there will be any change in the treatment

Agree with the Sivaram.......................

    I also think so. As-10 state that     

"The cost of an item of fixed asset comprises its

purchase price, including import duties and other non-refundable taxes or levies and any directly

attributable cost of bringing the asset to its working condition for its intended use"  but my internal auditor argue with me.

Any further clarification about the matter..?

 

Originally posted by : Suvendu Laha

    I also think so. As-10 state that     

"The cost of an item of fixed asset comprises its

purchase price, including import duties and other non-refundable taxes or levies and any directly

attributable cost of bringing the asset to its working condition for its intended use"  but my internal auditor argue with me.

Any further clarification about the matter..?

 You are right  in your arguments

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