Hi,
Currently, we are using the Rs 5,000 rule to capitalize, meaning anything under 5,000 gets expensed to P&L.
The question I have is, can we as a company say, we only want to capitalize 1 Lakh and above, as for us anything under 1L is immaterial.
Thanks in advance.
No , I do not think its correct procedure . You can not fix any limit for capital expenditure because for .i .e purchase of Mobile Phone for RS say 30000 /- or 4000/- or purchase of Vehicle of Rs 65000/- are an assets of the Company . you have to capitalize such expenditure you can not show in profit & Loss account . This is my opinion , you can consult with your company C.A or others on this issue .
CAclubindia
