Asset capitalisation

Case : X Ltd is Indian company having a foreign client Y Plc.  For purpose of certain project , Y Plc instructed X Ltd to purchase certain asset in India and entire cost is reimbursed to X ltd . Assets are deployed in X ltd office but entire control over rest on Y ltd. X ltd is only resposible for maintenance & safe guard of asset .

Question : Will this asset be capitalised in books of indian company X Ltd as entire cost of asset is reimbursed by Y PLC ??if yes, what will be accounting treatment for reimbursed amount ??     

Replies (1)

Nope,, Asset will not be capitalized in the books of X ltd.,,

Journal entry-

Y plc. A/c                      Dr.             xxxxxx

     To cash/bank A/c                               xxxxx

then,

Cash/Bank A/c           Dr.            xxxxxx

      To Y plc.                                             xxxxxx

Also,,,There is a term u may like to check upon.... ""Turn-key Projects""

Answer may differ depending on what kind of work X ltd doing....

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 25 October 2026
Article Intern (CA Articleship)

Arpan Bohra & Co

Hyderabad

CA Inter

View Details
Company
19 October 2026
Accountant

Jari Saree Center

New Delhi

Others

View Details
Company
31 October 2026
Accountants

sankaran and krishnan

New Delhi

B.Com

View Details
Company
24 October 2026
CA Industrial Trainee

Fytomax Nutrition Private Limited

Aurangabad

CA Inter

View Details
Company
19 October 2026
Accountants/Articles (Freshers/Experienced)

ADY & CO.

New Delhi

Graduate (Any)

View Details
Company
15 October 2026
Senior Accountant

Continental Belting Pvt Ltd

Mumbai

B.Com

View Details
Company
ARTICLESHIP 28 October 2026
Article assistants

Shyam S Gupta and Company

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 23 October 2026
CA Articleship / Article Assistant

M N Rao & Associates LLP

Vijayawada

CA Inter

View Details