Asset
This query is : Resolved
29 April 2009
A company has purchased a mouse of computer for RS 1500. Should that amt be capitalised or it should be treated as revenue expenditure. what will be the reason of the amt being treated as revenue or capital expenditure
IF it is capitalised then the entire amt will be shown as depreciation in the first year
IF it is capitalised then the entire amt will be shown as depreciation in the first year
29 April 2009
There is no specifiic criterias to decide whether a expense is capital or revenue but follwoing factors can decide:
Amount of exp, Esentiality of item with machinary, Life span, Durability etc.
Amount of exp, Esentiality of item with machinary, Life span, Durability etc.
29 April 2009
It should be capitalised provided it is newly purchased , otherwise it should be treated as revenue exp. (being replacement of old one, similar to repairs)
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