Hi Friends,
The year we were shifited our place from 2nd floor to ground floor. So we incurred expenses for renovating and all other expense related to shifting. We paid sum of money to our contractor for shifting and decoration and replacement. Whether theses expenses should be capitalized or charged to profit and loss account. Its a rental property and we are doing jewellery business in that place.
dear mari shankar,
the property does not belong to to you. how can you capitalise the expenses. i think you need to learn "what is a asset." refer accounting standard 26.
Thanks dude...
My client has incurred expenses for 32 lakhs but the same i have to ask the complete detail of that. So that my decision will brought in the case. The single payment. Guide me if i am wrong.
You need to see the Lease Agreement and nature of Expenses incurred. If the renovation is in the nature of furniture and fixtures and Electric Fitting which is enduring in nature then the same has to be capitalise. If the rent agreement is of short term and nature of expense is interior decoration and civli then the same has to be charged to P & L a/c even if the volume of exp. is high.
CAclubindia
