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
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Capitalization of Certain Categories
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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