New car purchased!!!!

Originally posted by : Ritesh
	Hey friends,when making an entry for new car purchased can registration charges,road tax,etc. be the part of cost of the asset???

According to As10 If Incremental cost relating to asset increase the value of assets or useful life of the assets it become a part of asset however in present case all cost are treated as revenue exp. and charge to profit & loss account.

why will they be treated as revenue expenses?

U may treat registration exp as capital exp because it is not incurred frequently and increases the value of assets but other exp like road taxes which incurre frequently such as quarterly or half yearly , not increases the value of assets and treated as revenue.ok

Registration Charges, cost of accessories etc and all other expenses incurred in acquiring the asset and make them oerational will be treated as Capital expenditure.

Road tax will be treated as Revenue Expenditure

thanks dilip and mahesh!!