18 October 2009
A company has incurred expenditure for fensing the land in which a factory was established, whether this expenditure is a revenue expenditure or not? Will it make any difference if this expenditure is incurred regularly as some villagers are spoiling this fensing for gazing their cattle as much grass is available in the open land of the factory.
18 October 2009
Fencing cannot be trated as revenue expenditure. The same should be capitalised. The reason being the benefit is of enduring in nature and it will increase the value of the asset to that extent.
CAclubindia
