Capitalisation cost of fixed assets

It cannot be capitalised. Insurance cost should be charged to Profit and loss a/c

As per my view the cost of asset include the all cost of purchase or acquisations so, while purchasing bus the first time payment of insurance it is the one part of cost of bus and capitalised in books , after the further renewal premium of insurance not capitalised and directly charged to profit and loss account.

Definition of cost of fixed asset as per AS10: The cost of an item of fixed asset comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price. Obtaining insurance is a mandatory requirement and hence insurance premium is a cost which can directly be attributed to bring the bus in to its working condition. On the basis of above, initial insurance premium (including GST) can be added to the cost of the bus. However, renewal premiums are charged to P&L account.