hello
i have a question from experts
my client has purchased car and insurance charges has been capitalised along with the cost of car.is this treatment is correct . and what would be the treatment for insurance of next years.should it be w/off or capitalised.
i think vehicle insurance are for one year and next year you got to renew it . so need not to capitalised. only life time taxes on vehicle are capitalised along with purchase price of vehicle
| Originally posted by :Kaya | ||
| " | i think vehicle insurance are for one year and next year you got to renew it . so need not to capitalised. only life time taxes on vehicle are capitalised along with purchase price of vehicle | " |
yes Kavya the answer you given is correct
| Originally posted by :p | ||
| " | hello i have a question from experts my client has purchased car and insurance charges has been capitalised along with the cost of car.is this treatment is correct . and what would be the treatment for insurance of next years.should it be w/off or capitalised. |
" |
ans:
actually insuranse charges are treated as running charges that occurs frequently within a certain period of time. so at the best of my knowledge capitalisation is not correct. it can be charged to p&l a/c
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