Sanjeev Parasrampuria (B.Com CA Final CS Final) (273 Points)
29 November 2012Dear All,
Raymond Textile Mills Pvt. Ltd. incurred Rs.2 Crore for intallation a Plant for protecting the health of worker from dust, which have useful life of 3 year.
Whether it is Capital Expenditure or not? If yes then why?
CA Pintu Mishra
(Chartered Accountant- Industry)
(514 Points)
Replied 29 November 2012
Yes it is a capital expenditure and will be shown as fixed asset...just because it is for the safety of workers and doesnt used in manufacturing operation would not disqualify it as capital expenditure. For example- we capitalize fire extinguisher which is purchased for the safety against fire.
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