Fixed Assets; Capital or Revenue

CA RAMESH KUMAR AHUJA (CA, DISA) (5445 Points)

15 October 2008  

 

I have certain queries in connection with capitalization of assets as Fixed Assets. These may be of great help to anyone in its profession. We can discuss these. We can have a discussion on anyone of these:-
 
1.      First Insurance on purchase of a new car. Whether to be capitalized?
2.      Software; Whether to be capitalized as Compter?
3.      What will be the rate of depreciation on software?
4.      Software like the one TDS Software; Whether to be capitalized?
5.      Fire Extinguishers; Whether may be written off @ 100%?
6.      A complete asset costing Rs.15000 when purchased in parts(components) and assembled and house costs Rs.12000/- with none of the component costing in excess of Rs 5000. Whether the whole of the asset may be w.off as the individual cost of all components is less than Rs.5000/-?
7.      Software developed in house. How the same should be capitalized? What will be the cost of such a software? How the auditor will verify its cost for the purpose of his Audit under the Companies Act and 44AB of Income Tax Act?
8.      Fee paid for seeking extension of the construction time to a Development Authority by a plot owner before the construction date. Whether to be capitalized?

                   9.   A Company has acquired 20 plastic Moulded chairs for Rs. 8000/- i.e., Rs 400 per chair. Whether all the chairs may be w.off

                         in view of the provisions that the asset upto a cost of Rs 5000 may be w.off @ 100%?