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chiranjeevi (Querist)
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09 July 2010 can i take plywood used for making racks in cloth manf, as capital asset,

can i take invoice date as capitalization date, asset came after invoice date

Rahul Gupta

Rahul Gupta (Expert)
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09 July 2010 Yes. Plywood Racks are used for making racks for putting inventory of your business. You can capitalize it as Furniture and Fittings.

Further for date of capitalization, since plywood solely won't comprise any asset. The asset (wooden racks) will be ready only when it gets manufactured by using the plywood and racks are ready for use. So the capitalization date will be the date when the racks are ready to use.