Dear All,
What are the benefits of capitalising an asset and what effect it has on the bottomline of a company?
Menu
Capitalisation of Asset
Replies (2)
The main objective is to show the True and Fair view of the Financial Statements. Capital Assets have a useful life which is more than one year depending on its usage. If it is debited to P&L A/c then the entity will not show the correct profit earned by it. Thus such capital asset needs to be capitalized ie. shown in balance sheet. The entity can claim depreciation on the Capital Asset as per the rates prescribed by the Income Tax Act, 1961.
Regards,
Devendra K
On capitalisation of assets only depreciation is charged to P&L account thus the bottomline reflects the true and fair picture o the entity.
Recent Topic
- Subscription/Membership fees
- Inverted tax gst refund
- Mismatch of pincode and district while registering
- Total income less than 12 lakhs but after processi
- Is Getsvision Solutions right for SMTP bulk email
- Queries on Stock/ETF gifting.
- Adding bank account for the deceased for ITR refun
- SALE OF EQUITY ON THE LAST DAY OF THE FY 2024-25 N
- Which ITR form
- Form 103 id delayed for submission for more than 1
Related Topics
CAclubindia
