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Audit - fixed assets

Shivam (Audit Assistant) (127 Points)

17 February 2014  

Hey one factory has completed more than 60% of the compound wall in 3 years. They want to capitalise it. Can they do it?? Balance 40% is pending....... 

 2 Replies

CA. Kuldeep Singhi (Entrepreneur) (424 Points)
Replied 17 February 2014

I think till the time the 40% get completed it should be shown as WIP & then it should be capitalised & depreciation should be charged on it.

Manoj Mehta (Head Of Department (Accounts & Finance))   (1479 Points)
Replied 03 March 2014

Dear Shivam 

Kuldeep is correct but there is another way of capitalising it. 

You can show it as completed boundry wall (For 60%) in the current year and you can treat the rest 40% as addition to completed boundry wall in the next year. Hence you will be able to take the benefit of Depriciation in your accounts from current year itself. 


I hope it will help you 

Regards to you


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