Capitalisation on Fixed Asset

Fixed Assets purchase from Mr A at Rs 1,18,000

Freight Paid to Mr. B for this Fixed Asset Rs 30,000 (GST RCM PAID)

Now Capitalisation of Fixed Asset would be at Rs ................
Replies (5)
Quick Summary
This discussion clarifies the capitalisation of fixed assets, specifically addressing whether freight costs should be included in the asset's value. The consensus is that any expenditure incurred to bring a fixed asset to its intended location for installation and use, such as freight charges, must be capitalised. This ensures the asset's value accurately reflects all costs necessary for it to become operational.

118000 rupees

Freight incurred to bring the asset to the location of installation has also to be capitalised.

Pramod Sir freight is from Mr. B (another party)

Still the concept of capitalisation remains. It is an expenditure incurred to bring asset to the location of installation and then only asset will start performing. It is not necessary that you have to pay freight to the supplier of the asset

Yes it was a mistake, Freight was included in cost of assets

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