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Fixed asset Capitalisation policy

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Rishi Sharma

30 Points Posted on 12 February 2023

Hi,

What are companies act latest provision for fixed asset Capitalisation threshold? Can a company choose to adopt a policy for capitalising assets with unit cost of INR 10000 or 15000 or more? What are applicable provisions of companies act and IND AS in this regard. Please guide.

Thanks

Rishi

Replies (3)

Quick Summary

This discussion seeks clarification on the latest provisions within the Companies Act and IND AS regarding the fixed asset capitalisation threshold. The user is inquiring whether a company can establish a policy to capitalise assets with a unit cost of INR 10,000 or INR 15,000, and what specific provisions apply. They are considering increasing their current threshold from INR 5,000 to INR 10,000 and need guidance on its permissibility under Indian company law and accounting standards.

sabyasachi mukherjee

Profession

19978 Points Posted on 13 February 2023

Assets less than 5000 are debited to pl account.Assets worth more than 10000 to 15000 are included in block of asset.

Rishi Sharma

30 Points Posted on 13 February 2023

Thanks. Currently we have same policy of capitalising item with unit cost of Rs 5000, and now we want to increase that threshold to Rs 10000 meaning everything less than Rs 10000 will be charged to p&l and if unit cost is more than Rs 10000 then it will be capitalised. Is this allowed under companies act? If yes, what are the required provisions under companies act and IND AS? Please advise.