depreciation on windmill

Dear Priti,

GENERALLY THERE ARE 2 PRINCIPLES FOR CAPITALIZATION OF AN EXPENSE:-

1) WHETHER AN EXPENSE IS TO BE CAPITALIZED OR NOT DEPENDS UPON THE FACT THAT THE BENEFITS EXPECTED FROM THAT WILL EXCEED FOR MORE THAN 1 YEAR OR NOT..

2) ALL EXPENSES INCURRED IN RELATION TO A FIXED ASSET TO MAKE IT USABLE SHALL BE CAPITALIZED...(IRRESPECTIVE OF THE FACT THAT IT'S BENEFIT CAN  BE USED FOR A PERIOD OF MORE THAN ONE YEAR...) FOR EG:- INSTALLATION & COMMISSIONING CHARGES, FIRST INSURANCE IN CASE OF MOTOR VEHICLE,FIRST RECHARGE COUPON IN CASE OF A NEW MOBILE PHONE, ETC...

HENCE IF CONTRIBUTION CHARGES TOWARDS USE OF POWER EVACUATION EQUIPMENT IS NECESSARY FOR THE FUNCTIONING OF FIXED ASSET THEN IT SHALL BE CAPITALIZED...