Fixed Assests

Yes, insurance expenses will be capitalise along with the cost of asset.

Will it be the first insurance OR some thing else ...............

And what about Consultant fees,,,,,,,,,,,,,,,,,,,,,,,

Only First time insurance capitalised and the consultany charges paid for purchasing of Assets are also capitalised

Sorry No Idea about consultant fee..........

First Insurance will be capitalize

Thanks Mr. Ramanju

.Yes, Consultant fees paid before the asset put into use should be capitalised

. Cost of the asset include Purchase price + Other Incidental cost (Capitalised portion of Insurance expenses)

All the expenses incurred before the assets put to use should be capitalised either it is Insurance  or consultancy fees.  but it should be one time payment .Similarly Interest on loan taken for purchasing an assets will not be part of cost as at regular interval interest payment will be made, So this exp. will charged to revenue Expenditure

Here the question asked is whether the insurance & consultancy charges can be capitalised or not. The answer is only first insurance premium paid & consultancy charges are to be capitalised.

Borrowing cost is to be capitalised only if the gestation period is long and it takes a asset long time to be put to use.

all costs need to be captilised.

Mr.Ramanju I am agree only that Borrowing cost should be capitalised only in that  assets which  will take long time to become an assets. otherwise borrowing cost shold not be capitalised.

is the treatment same for both accounts and Tax??

Sir,

only the expenses incurred till the asset is READY TO USE (NOT PUT TO USE) is to be capitalised in books of accounts as per AS-10.

BUT IN TAXATION EXP. INCURRED TILL ASSET IS PUT TO USE WILL BE INCLUDED IN ACTUAL COST (EXPL.8 TO SEC.43(1))