Revenue or Capital?

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Indian co.purchased fixed assets from chinese co.located in China.The original bill received is in Chinese language.Indian co.incur ₹5 lakhs for conversation of Chinese language to Indian language.What is the treatment of 5 lakhs ?Is it revenue or Capital?
Replies (2)

Hi,

This has to be linked with the Main asset. In case you are spending an amount on Huge capex worth a huge money, then all the expenses in order to bring it into existence can be capitalised. Generally most of the professional fees in relation to obtaining techincal assistance report,other professional reports are capitalised as part of the asset. In your case, my answer would be you can capitalise the same treating it as a professional service in relation to the asset.

it is attributable to the fixed cost..

since all the terms and conditions and specification is in different language.

company not able to execute any claim in future regarding the warranty etc. also not able to operate/install etc.


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