Capitalization of intangible asset

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 August 2015 As per AS-26, intangible asset can be capitalized only if
1 it results in future eco benefit, and
2 useful life can be estimated.

So should an accounting software, like tally, purchased be capitalized?

CA AYUSH AGRAWAL

CA AYUSH AGRAWAL (Expert)
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13 August 2015 Nops, it should not be capitalised, as without software the computer will not loose its identity and could not be used for work.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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13 August 2015 Tally software can be capitalized as per AS 26. It has future economic benefit and useful life. Capitalize and depreciate it for 5 years.

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CA AYUSH AGRAWAL

CA AYUSH AGRAWAL (Expert)
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17 August 2015 Although I have advised many times to capitalise this, but recetly there was a case where capitalisatiion has been disallowed.

I would suggest you to take decision based on the amount involved.