A expenses which is capitalize earlier now its treated as expenses and not capitalize but asset is still under construction.
what will be the effect of above treatment?
and also i want to know whether security guard payment can be capitalized?
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query-Capital work in process.
Replies (1)
1) value of asset will decrease by the amount so capitalized earlier, to reverse the effect.
2) send this amount to Profit&Loss account as an expense
3) security guard's salary is in no way increasing the value of this asset. the asset does not become more productive than it was, after assigning the security guard. hence, no, his salary cannot be capitalized
2) send this amount to Profit&Loss account as an expense
3) security guard's salary is in no way increasing the value of this asset. the asset does not become more productive than it was, after assigning the security guard. hence, no, his salary cannot be capitalized
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