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software purchase capitalize

Archit Melana (CA final) (76 Points)

17 January 2018

Will software purchase along with computer capitalize or not??

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4 Replies

Rishad kk (Article) (25 Points)
Replied 17 January 2018

Yes Capitalise

CA Amrita Chattopadhyay (Audit & Assurance) (13029 Points)
Replied 25 January 2018

The software becomes the part of the computer without which the computer will not operate. Thus the software has to be capitalized

Milind M. Kulkarni (Practicing CA) (580 Points)
Replied 24 February 2018

Identify software purchased without which computer cannot run. You have to capitalise all these softwares along with computer. The company may have purchased certain other softwares which are useful for the business but not necessary to run computers. They are to be treated as softwares separate from computers. The company may capitalise them or charge to revenue depending on perceived usefulness in long term.