What is the tretment for Major cost for restructuring a line of production or distribution which will give significant future economic gains. For Example, in 2012, a firm planning restructure its supply chain management, estimating that it will take 5 years to complete the entire process and cost Rs.10,000,000 per year including all costs.
Please advise.
Thanks
Defer the expenditure for certain years,depending on the materiality(as it varies from co. to co.) and procedures of the company
This has to be put in WIP and on the year of completion of the restructuing, the same has to be capitalised.
| Originally posted by : forhistory | ||
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Defer the expenditure for certain years,depending on the materiality(as it varies from co. to co.) and procedures of the company |
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A treatment of creating a provision and release yearly expense against these provision can be accepted in such situation? Can you give me a narrative details please.
Thanks
CAclubindia
