Quick question that's in dispute: Cost of spare parts used for smooth productivity of a machinery is capitalizable? It will come under Consumables & Equipments or under Plant & Machinery?
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Cost of spare parts-accounting treatment
Replies (6)
If it increses the capacity or productivity of the machinery, you can capitalise the same
If it increses the capacity or productivity of the machinery, you can capitalise the same
any spares being purchased for wear and tear of machineries, has to be booked as revenue expenditure. The capitalisation part ends for any machinery, till it starts production, say , 90 days from the date of installation.
It is for d assets and it increases the efficiency of d assets so it must be capitalized. .
Spare parts, if meets the recognition criteria as per Ind AS 16, can be capitalised otherwise will be treated as inventories.
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