capitalisation

AS 646 views 4 replies

if Any new asset like bolier lifting one crane is hired rs 33000/-

that crane hire charges is capitalised or not

if  capitalised which asset  that exp is aded & that crane charges any T D S attracted or not

Replies (4)

Dear Lakshmikanth,

The treatment of leased assets is to be done on the basis of AS-19, i:e

In case of Operating lease, asset will not be capitalised.

Whereas, in case of Finance Lease, asset will be capitalized.

Yes TDS will be applicable IN BOTH THE CASES on lease payments u/s 194 I, BUT SINCE THE ENTIRE EXPENDITURE DOESNOT EXCEED Rs. 1,20,000/-, therefore no need to deduct TDS.

Thank u amir but my doubht is not the lease point view 

normal asset like plant & machinery ie boiler un loading charges ( like use crane)

Thank u amir but my doubht is not the lease point view 

normal asset like plant & machinery ie boiler un loading charges ( like use crane)

Dear Sirs,

For Govt companies,  for sanction of major projects say Rs.500 crores or so,  certain % is required to be spent under community welfare (social welfare) like providing drinking water in back-ward area, conducting medical camps,  construction of school for tribals etc.

such expenses have no relation to the assets which the company is going to capitalise ie. such expenses are not incurred to bring the asset to the present condition and location.

But such expenses are to be definitely incurred (condition to sanction of project)

whether such community development exp can be capitalised as an indirect exp.  

any guidance issued by Institute on this or any general practice by CAs.

 

regards


CCI Pro

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