Capitalize or not

Originally posted by : Devang Gajjar

As per AS-10 on "Fixed Assets", if any expenditure has increased the efficiency or useful life of the asset then it must be Capitalized and if not then charge it to P&L A/c.

As per AS-10 Fixed Assets, any amount spent for the long term benfit should be considered as Capital Expenditure. Therefore, the amount spent for the Building is a Capital Expenditure which should be Capitalise fully.

Thanks all.

But what should be the treatment for the assets which was destroyed in fire?

If the new asset has come into existence and expenditure has really increased the efficiency of the existing asset whatever it would be irrespective of the amount of expenditure should be capitalised.

huge renovation of wrk will be capitalised against old one which was destroyed..

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