09 April 2015
Our organisation is going for AMC for maintenance of Fixed Assets.The charges paid for AMC is being valued as a % of fixed assets.Now issues raised whether freight, insurance, packaging charges paid at the time of purchase of fixed assets would be excluded for determination of AMC charges?? Please suggest.
09 April 2015
In general it is calculated on Acquisition value as Shown in the fixed asset register but as said by expert it will depend on the terms agreed upon by the parties to the contract. Should be clearly mentioned in the contract to avoid any litigation.
16 April 2015
thanx for your reply............if nothing is mentioned in the contract, den what is the remedy??? can we go for only purchases price or else capitalised value is to be taken for fixing up AMC Charges??
16 April 2015
in mah view it should b purchase price of assets.. because it is the fair price for AMC ...
because there are many assets which needs high expense til it capitalise, like transportation installation cost... these expenses wil b capitalised but have no connection with the AMC Charges...
17 April 2015
thanx a ton ...........even i have same opinion......therz lot of expenditure incurred to bring that asset in working condition.....like insurance, freight , packaging etc.....these should be excluded for fixing up AMC charges based on percentage on fixed assets..