Capitalisation

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Ravi Kumar (Querist)
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08 October 2008 Hello Sir

I am unable to understand "how to pass an entry for Capitalisation i.e., when you buy a Fixed Asset, we have to pass an entry for it and simultaneously we have to pass an entry for Capitalisation as well". Can you tell me the same Sir

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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08 October 2008 On purchasing a capital asset:

Capital asset under installation Dr
To party(or Bank as the case may be)

Capital asset under installtion Dr
To Party/(or bank)
(various expenses incidental)

Fixed asset a/c Dr
To Capital asset under installation
(When the assets are installed)