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Capitalisation of bundled goods and services received

336 views 4 replies

Ahanak

Article

281 Points Posted on 22 May 2024

We have entered into a contract with a supplier for office renovation of a rented property and also supply of furniture for the same property for which the supplier has billed a single amount without bifurcation of the furniture and office renovation expense .Whether this expenditure would be capitalized or not and with what amount.

Replies (4)

prasad Nilugal

GST Practitioner & Accounts

15085 Points Posted on 23 May 2024

There are Two expenses 1) Renovation expenses of rented property 2) Purchase of Furniture ( Asset ) , so please Clarify , Renovation has been done using Furniture or both are different expenses .

sabyasachi mukherjee

Profession Business

28207 Points Posted on 23 May 2024

Kindly arrange for the same. Contact with supplier.

Ahanak

Article

281 Points Posted on 25 May 2024

@ prasad Nilugal both are different expenses , we have entered into a contract with a supplier to renovate our office which includes painting of walls , repair etc and also supply of office furniture for which a lump payment is agreed. So how this expense is to be treated in our books.

prasad Nilugal

GST Practitioner & Accounts

15085 Points Posted on 27 May 2024

If both are different expenses then , you must have ask for for two different Invoices , one for expenses and another for Asset Purchase , then painting and renovation expenses will be Revenue Expenditure , and Furniture you can Capitalise . Only one Invoice for both different expenses will be problematical for Audit Purpose .

Take more Opinion on this .