Capitalization of Certain Categories

Please clarify whether these two itmes can be capitalized?

1. Purchse of new stabilizers for Air Conditioners. (Initially  stabilizer cost has been added to the value of A/c)

2. Tally accounting software purchased

 


 

Replies (2)

ya both would be capitalised , & sofwares comes into the category of computers & wud b eligible  for dep @ 60%

Both these items will be capitalized.

With regard to the stabilizer it varies on management policy.

It can be added to the cost or it can be shown as a seperate asset in the same block. But in the given case you can continue doing the same.

Now the software - when it is bought, its life is estimated to be more than a year, hence it should not be treated as revenue but CAPITALIZED.

But the 60% depreciation for the software is under the IT Act and it varies in the Companies Act.

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