Under which head will the expense on renewal of software be classified?

We have renewed our Tally software license. I want to know under which head should I treat it?

Replies (20)
Quick Summary
Software renewal like Tally license renewal is treated as revenue expenditure. It is not capitalized because it provides benefit only for a limited period. It is usually booked under indirect expenses such as AMC, subscription fees, or software renewal charges.

rate fee and taxes
capitalize it under the respective head under fixed assets

charge it to computer maintenance expense.

Renewal of Tally software license is renewal charges which is to be paid every year and it is valid for a period of 1 year only.
Hence it will not be treated as Capital expenditure and will be treated as Revenue expenditure.
Also same will be booked as subscripttion charges or license renewal charges under head indirect expenses.

For Tally software, renewal fees will be paid every year. It is revenue in nature. It comes under the head Indirect expenses.

 

IT will be Expenses only and will booked under INDIRECT EXPENSES like -Subscripttion fees, Renewal Charges.

however if you are paying fees for more than one year than you can booked proportionate Expenses and transfer balance to PREPAID Expenses.

 

 

 

you can debit the amount to Annual Maintainace Cost (AMC) Expenses under indirect expenses

Will repainting of a factory premises be considered as a capital expenditure? 

if company purchased online naukri portal so where can we show under expenses head in income statement.

Tally Renewal expenses are revenue in nature can be classified as Accounting expenses or AMC under indirect expenses.

 

Software renewal charges are revenue in nature so they should be charged as indirect expense under Software renewal charges A/c are any other suitable head.

We transfer from the old warehouse to the new warehouse, we moved all the materials and we spend about 90,00/-

In which Account I have to select this expense

For this expense, you should select an appropriate expense account such as "Moving Expenses" or "Warehouse Relocation Expenses" in your accounting system.

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