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Depreciation
Hello !
Can anyone please clarify whether the purchase of SMPS (switch mode power supply) and RAM added to cost of Computer and depreciation charged on the same ? or it would be treated as Computer Expense.
Replies (3)
Normal concept is that if a spare part increases the capacity or life of the product then its added to the cost of the asset, otherwise treated as revenue expense.
So you can add it to the cost of the computer and charge depreciatio on it.
Thank You.
In my opinion, Switch Mode Power Supply does not increase capacity of System where as R.A.M absolutely add capacity to system which enable you to do process faster and efficiency. Therefore cost of Switch Mode Power Supply can not be capitalized and can be claimed as expense for I.T purpose but R.A.M cost can be added to COMPUTER BLOCK and claim depreciation on it u/s.32
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