what is the meaning of amortization and capitalization??
2 Replies
Bhavik Davda
(Proprietor)
(238 Points)
Replied 02 June 2010
In case of Asset
The definition of the two terms will be as follows.
1. Capitalisation- Charging the value of an asset to the Capital Expenditure and utilising the value of the same with the wear and tear of time by way of Depreciation- it was in simple terms-
2. Where as amooritisation mean charging the asset value to miscellaneous Asset and spreading the benefit over the pre-fixed life of that asset.
Diffrencere
in case of capitalisation- asset value disappears from the balance sheet on the industry prescribed rate- i.e. depreciation rate where as in case of amoritisation the value being charged to revenue as per business policy...
Lets see other views....
Regards,
Bhavik Davda
022-6526 6529
Kalpesh Chauhan,
(Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))
(8311 Points)
Replied 02 June 2010
Agree with Bhavik.
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