ANY CRETERIA FOR CAPITALISED ASSET???

Dear Rakesh,

Whether to capitalise or not depends upon the materiality of transaction and nature of business. For eg. A Tool Kit worth Rs. 10000 is a capital asset for a garage but the same tool kit can be treated as revenue expenditure for a car manufacturing company. Though you are right that anything that enhances the life of an asset should be capitalised.

Also regarding your querry of not capitalising any asset the value of which is less than Rs. 5000 is a Government Rule. I would like to clarrify that there is no such rule and whether to capitalise an item or not is taken care by the Accounting Policies of the company. So you should go through the Accounting Policies of the company before capitalising any item. Also there is a general practice that any asset which is less than Rs. 5000 is 100% depreciated in the year of purchase (But again these all depend upon the Accounting Policies). 

very good xplanation