Dear Frinds,
Hope you all are well. Got a crtical scenario to solve with you.
My compnay purchased right of use of a OPTICAL FIBER CABLE for 15 years internationally. We have to pay monthly maintenance charge (inclusing insurance, repair, obsolence charge). No legal ownership or title will be transferred during the time. 15 years covers substantial lifetime part of the asset. There MAY BE a purchase option after 15 years.
Bank finance us for this purchase.
Now, we want to show it as Non-Current asset under no No FInance Lease method. (will trated like furniture purchase)
Could you please help me to way out for showing it as Non-Current Asset rather than leased asset.
If it is leased asset will Tax Authority allow my depreciation as admissible or they will disallow it or instead of depreciation Tax Authority will allow Rental value (similar amount to Dep)
Thank you in advance
CAclubindia
