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Capital or revenue expenditure
if we have purchased car of rs. 500000/- then after some days we purchased car accessories of rs.4500/- then should we capitalised Rs. 4500/- or treated as revenue exp?
Replies (8)
That should be depend on the type of accessories.If it it is car cleaner then revenue exp.
it will depend upon the type accessories of car......if from this accessories
the capacity or effeciency of car increases then it will be ecapitalised otherwise revenue.....
Which car accessories hv been bought ?
If capacity or efficiency increases then treat it as capital otherwise waise to revenue hi hoga
This concept of increasing efficiency is theoritical and difficult to apply in practise. Accessories bought along with the car can be capitalized. A few days gap should not matter. If the accessories are brought after a delayed time period its better to treat it as revenue exp.
If accessories r bought before car put to use , then we can treat it as capital expenditure ?????
If accessories r bought before car put to use , then we can treat it as capital expenditure ?????
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