A Co. has purchased a software (MS Ofiice 2010) for all its 20 computers for around Rs. 1,60,000.
Also the co. has taken an insurance on the software for which the co. is paying premium.
Now whether the software should be treated as a revenue expenditure or capital expenditure?
I would suggest you to capitalize the Software along with the Insurance and claim depreciation @ 60%.
Regards,
Devendra Kulkarni
Software should be capitalised with the Insurance premium paid at the time of purchasing only. Annual premium to be expensed out.
Yes Software Should Be Capitalised and the Insurance Premium Paid should be Expensed in the year in which it is incurred.
It depends !! there are controvercial judgements of HC on the same, If the company u tokin bout is really big , you can expense that out too, but intention of the company should also be kept in the mind in case of capitalization..
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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