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
2 Replies
CA. Nuba Subzwari
(CHARTERED ACCOUNTANT)
(501 Points)
Replied 06 June 2010
ya both would be capitalised , & sofwares comes into the category of computers & wud b eligible for dep @ 60%
Aneesh
(Pursuing CA)
(101 Points)
Replied 07 June 2010
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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