Compulsion on Capitalisation of Repairs to any Fixed Assets

Is there any compulsion on Capitalisation of Repairs to any Fixed Assets (Land , Buildings etc.) ?

Can I charge the whole expenditure of such repair to the P&L A/c ?  Any prohibition pertaining to the same under the Cos Act or The I.T Act ?

Plz inform.

 

Regards,

Sumanta  

Replies (6)

there is no compulsion to capitalize the repair . you can charge it to pand l ac. but it should strictly related to repair according to accounting std.

rtectify me if i am wrong

Originally posted by : Aditya(future ca)

there is no compulsion to capitalize the repair . you can charge it to pand l ac. but it should strictly related to repair according to accounting std.

rtectify me if i am wrong

Plz let me know which Accounting Standard (AS ?) deals with the treatment for repairs.

AS 10 talks about accounting for fixed asset which also talks about treatment of repair and other exp on fixed assets

According to me there is no compulsion on capitalisation of Repairs. However if the repairs is susbtantial nature whish is increasing the useful life of assets / increasing the productivity then such repair should be capitalised.

Repairs are to be debited to P & L a/C...

unless it increses the productivity of the FA or leads to increse in the life of FA...

 

In the latter case.... Capitalise it...by adding it in the amount of FA...

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