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Capitalization of expenses

Accounting Entries 187 views 1 replies

My Company wanted a mechanised vehicle very urgently but did not have the cash surplus to pay for it. It, therefore, hired the vehicle by paying very high monthly hiring charges. This continued for 9 months. The Co is into cash now and wants to acquire the vehicle as also capitalise the expenses incurred over the 9 month period. The vehicle has an operating life of 10 years. Please advise whether this is possible

Replies (1)

No... The expenses to PandL accounts...

Not in Capitalize....

 

In case you ll purchase the vehicle then It ll be add your Asset head from the date of purchase


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