Audit - fixed assets

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....... 

Replies (2)

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.

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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