accounting of electrification expenses in leased factory

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 January 2011 Electrification expenses are incurred by an undertaking in its leased factory which is to commence operations in 2 months.Can this expense be written off over a period of 3 years as the factory will be shifted to own premises in 3 years?

Thrissurkkaran Ishtan

Thrissurkkaran Ishtan (Expert)
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17 January 2011 If you cant take the items with you (you will have to leave it when you get out, then yes, it will have to be depreciated over 3 years.

This is assuming that the benefit from this expenses will be received over the next 3 years and accordingly qualfies to be capitalised.