25 October 2013
my company installed a server (computer hardware) few years before and this year they purchased material (of Rs. 2687891)for their networking dressup as include this amount in asset. Is this correct to include this in asset side (dont bother about amount of purchse the matter is about nature)
25 October 2013
it is not the nature of the expense but the benefit accruing from it that shall be the determining factor. if the said expense is going to add value to the server and accrue for more than a year, the you have to capitalize it.
26 October 2013
Yes if after incurring exp there is increase in performance of the asset compared to the standard prev performance then it should be capitalised as per as-10.
CAclubindia
