what is the meaning of amortization and capitalization??
kapil abhishek (student) (293 Points)
02 June 2010what is the meaning of amortization and capitalization??
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))
(8310 Points)
Replied 02 June 2010
Agree with Bhavik.
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