This accounting standard says that any amount calculated on amortization of IA has to be charged to P/L account.. But I came across a sentence which says "Amortization of IA used in production process is included in carrying amount of inventories"..
Why so?.. what is the reason behind it?
in AS-2, you must have read that depreciation on fixed assets used for production (ex. plant & machinery, factory building etc) is considered as a coversion cost and is added to the cost of inventory.
justification:- without incurring this depreciation (i.e. without using the production assets) the finished goods cannot be produced
same is the case of AS-26, with regard to treatment of amortization of Intangible asstes used in production process
Thank you ....
May i know what type of intangible asset we can use in production process please??
like softwares
CAclubindia
