Amt expensed towars laptop screen replacement

Others 734 views 4 replies

A company has incurred expenses towards replacement of Laptop Screen. My query is, Can it be Capitalised?. If so why? 

Is it because it increases life of asset? Then why not Laptop Battery & Internal Harddisk of Laptop's are capitalised? 

 

Replies (4)

Replacement of damaged screen of a laptop has to be expensed. 

yes , it will capitalised as it increses the life of asset, but we don't capitalise battery purchase as it is known and recurring exp.  and can't say abt harddrive.

Yes It should be Capitalised since life of Laptop got increased but in Practical Life we don't capitalise it because if we capitalise it then only 60% of that expense will be allowed as it will form part of Laptop which carry 60% of Depreciation rate as per IT Act.

 

& if we book it as an Expense the deduction of 100% will be allowed since you showed it as a revenue expenditure( General Reapirs & Maintainance)

 

Replacement of screen would not increase the life of the laptop neither would it increase the efficiency.

It would be an item of Revenue Expenditure. 


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