We have a cold store and purchased pallets for that cold store (costs more than 5 lakh), so my question is how to show them in accounting -: as separate asset, land & building asset or expense (if yes then please mention in which expense head)
Note - Pallet are made from wood, it is used to keep goods in cold store as we can't directly keep goods on the floor due to slippery surface
Thanks in advance for answer
AS10.13&14 is unclear about recognition. How ever additions are included in the carrying amount of PPE. So add the pallet cost to the carrying amount and disclose the information.
It is classified as plant and machinery if the life of the pallets are more than 1 years. otherwise expense out.
Clearly, you are using these pallets for a couple of years for storage of inventory, it should be capitalised as an asset and depreciated over its useful life like other furniture.
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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