Hi Experts,
I have a querry about Assets Capitalisation.
We have purchased New 60 Plastic Chairs(Indi. Cost-325/- Each). Whethr it would be capitalised As per Ind AS16(We are covered under Ind AS- Net Assets 750 Crore.) or it would be treated as revenue nature expenditure.?
Please Help.
If asset satisfies the recognition criteria as per IND AS 16. then it can be capitalise.
Definition: Property, Plant & Equipment are tangible items that:
- are held for use in the production or supply of goods or services, or
- for rental to others, or
- for administrative purposes; and
- are expected to be used during more than one period
Recognition criteria:
The cost of an item or Property, Plant & Equipment shall be recognized as an asset if, and only
a) it is probable that future economic benefits associated with the item will flow to the entity
b) The cost of the item can be measured reliably
there is no limit in IND AS (as it was there earliesr i,e Rs. 5000)
Now company has to make a proper policy to decide...
on the basis of accoutning policy employed by the company for smaller value of fixed assets it has to classified.
Ans: can be capitalised (if there is no accounting policy for the company for smaller value of items)
Sir,
First of all thanks about your valuable suggestion.
As you aware about Schedule II of Companies Act 2013, Useful life of Furniture & Fixtures decided in 10 years Class. However plastic Chairs has no certain life. I may carry more than one years, may not depending upon use.
What will be the clear view in this circumastances.
There are two circumstances arise
CAclubindia
