capital or revenue
This query is : Resolved
23 June 2008
Sir,
1.A sea going ship replaces its hull(engine)due to mechanical failure.the ship has been accounted as a single asset along wiith the engine, in the fixed asset register.the engine is of same capacity as the earlier one. should the the expenditure be treated as capital or revenue? will the treatment differ if the engine is of enhanced capacity?
2.A car parking shed is constructed attached to a building and is integral part of the building. if the building is demolished the shed will loose its utility value and has also to be demolished. hence it has the same life as that of the remaining life of the building.the capacity of the building is increased as it is able to provide parking facility which it did not have earlier.should the the expenditure be treated as capital or revenue?
1.A sea going ship replaces its hull(engine)due to mechanical failure.the ship has been accounted as a single asset along wiith the engine, in the fixed asset register.the engine is of same capacity as the earlier one. should the the expenditure be treated as capital or revenue? will the treatment differ if the engine is of enhanced capacity?
2.A car parking shed is constructed attached to a building and is integral part of the building. if the building is demolished the shed will loose its utility value and has also to be demolished. hence it has the same life as that of the remaining life of the building.the capacity of the building is increased as it is able to provide parking facility which it did not have earlier.should the the expenditure be treated as capital or revenue?
23 June 2008
sir please give reasoning in detail to treat both as capital expenditure.
because in both the examples engine as well as car shed cant be used in isolation when the ship is scrapped and the building is demolished respectively though they may have more useful life left than their parent assets.
because in both the examples engine as well as car shed cant be used in isolation when the ship is scrapped and the building is demolished respectively though they may have more useful life left than their parent assets.
24 June 2008
1) can claim as revenue exp. also, but may need to fight case against dept. however at last u will win.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- REGARDING GST ON COMMERICIAL PROPERTY
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- ITC temporary reversal and reclaim
- GST on export of services and Input Credit
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- TDS U/S. 194NF
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- Applicable TDS rate for sale of property in Nov 2024
- Donation Receipt u/s 80G
- VERIFICATION OF REFUND RELATED
- GST Regis.
- ITC c/f from FY2022-23 to FY2023-24 entered the same in table 8C of GSTR9 of FY 2022-23, in FY23-24
- Late filling fees Demand by gst office
- IGST Credit-Show cause notice issued-confusion
- Short and Excess provision of expenses
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
- How to adjusted advances given or receipt
Trending Online Classes
CAclubindia
