Dear All, I have a question here. We have bought a software costing approx 25 lac for renderring certain services to one of our numerous group clients. So, basically, this SW is bought to serve only to one client. Now, the question is can we go ahead and expense it in the same month when it is put to use and bill the entire cost to the client. Or, should we capitalize this cost and amortize it over the useful life of the SW. If we capitalize this cost, then in that case, if the client stop availing our services in future, can we bill the remaining cost to the client and continue amortizing it or expand it at that point of time in the Income Statement for the remaining part of the cost.
Please advise with AS/Act reference.
CAclubindia
