Renovation and repair

Yes, if it is not kind of general maintanance.

Yes, whether you can capitalize the expense of renovation and repair of an old building depends on the nature of the work. If the repairs and renovations significantly extend the life of the building, improve its functionality, or increase its value, then those expenses can often be capitalized as part of the cost of the asset (the building). On the other hand, if the work is considered routine maintenance or repairs that don’t improve the structure beyond its original condition, the expense is usually treated as a current period expense.

As for me, I’m currently dealing with a renovation, and honestly, I’m getting really tired of it. The endless work and decisions! 😅 I was wondering, though, what do people do during breaks from renovations? Do you watch shows, play games, or have other ways of passing the time? Could use some distraction ideas!

Thank you for the recommendation! It sounds like an amazing game, and I appreciate the suggestion. I’m always on the lookout for fun, engaging experiences with fair and transparent conditions, so I’ll definitely check it out!

Capital vs revenue:

• Capitalise if the work creates a new asset, adds capacity, extends useful life significantly, or improves the asset beyond its original condition (e.g. adding floors, structural rebuilding, a new façade, major upgrades). AS 10 / Ind AS 16: subsequent costs are capitalised if future economic benefits flow and the cost is measurable. The replaced part is derecognised.

• Expense if it maintains the asset in its existing condition: repainting, plastering, repairs to flooring or plumbing, routine replacement.

• Tax: Sec 30/31 allow "current repairs" (not capital in nature). The Explanation to Sec 30 excludes capital expenditure. Courts apply the enduring-benefit test. Renovation of an old building for the same use without new capacity is often allowed as revenue (case law is mixed).

• Leased premises: renovation cost by the tenant is a "building" asset (Explanation 1 to Sec 32), depreciated at 10%.