15 February 2014
well you should normally capitalize expenses specifically incurred in relation to generation of the asset. so labour food expenses could also be included.
16 February 2014
As per Indian GAAP Framework, before to recognized an item as "assets", you need to ask few question, and if the answer is yes then you can do the capitalized that as assets : 1. it should result in future cash flow or to be used. 2. the amt should be material, it refer to 1% of gross income.
Now, I come to your query, since the food exp does not result in result of generation future cash flow.
Hence, it should certainly to be recognized as EXPENSE.
Also, as per AS-9, such exp to be booked as expense.
16 February 2014
As per Indian GAAP Framework, before to recognized an item as "assets", you need to ask few question, and if the answer is yes then you can do the capitalized that as assets : 1. it should result in future cash flow or to be used. 2. the amt should be material, it refer to 1% of gross income.
Now, I come to your query, since the food exp does not result in result of generation future cash flow.
Hence, it should certainly to be recognized as EXPENSE.
Also, as per AS-9, such exp to be booked as expense.
for an internally generated asset, the expenses related to construction activity also need to be capitalized that would include labour cost (which generally also involve food expenses)
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