my client is purchased one shop and also immidiatly paid maintainance charges for 1year of said shop
so can we capitalised that maintainance in the value of shop??????????????
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Plz revert if you aware of this
Replies (7)
Here Maintainence Charges will be recurring in nature. Again next year shop ownner have to pay the same, So the expenses should be charged off as expenses.
but from next year my client is paid monthly. it is builders policy that first year's maintenance should have to pay on purchase of property.
Hi Chirag,
Any maintenance-related expenditure which does not increase the value of the building should be charged off whether the person is paying monthly or yearly.
Maintenance costs allow an asset to continue to be used during its originally established useful life. Maintenance costs are expensed in the period incurred.
| Originally posted by : Chiradeep.R.H | ||
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Hi Chirag, Any maintenance-related expenditure which does not increase the value of the building should be charged off whether the person is paying monthly or yearly. Maintenance costs allow an asset to continue to be used during its originally established useful life. Maintenance costs are expensed in the period incurred. |
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but in case of insurance paid on new car we capitalised na????
no insurance expenses do not add value to your asset..so not to be capitalised
only those costs that are necessary to bring the asset to its present working condition or add value to it should be capitalised as per AS10
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