Capitalisation of an asset

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nikhil (Querist)
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09 September 2010 Hello

I would like to know whether an asset with the individual value of less than Rs 5000/- but collectively of a higher value when seen on a year base be capitalised or can be writen off as revenue expenditure.

for Eg if the company purchase a camera and it has a policy of not capitalising an asset whoes individual value is less then Rs 5000/-.

but the company purchases 7 camera in a year colletively of Rs 21000/- ie Rs 3000/- each.

can it write it off as a revenue expenditure as according to its policy or it much book it as fixed asset ignoring its policy of capitalisation.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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09 September 2010 for Eg if the company purchase a camera and it has a policy of not capitalising an asset whoes individual value is less then Rs. 5000/-.

I think you have by mistake put "not" in above sentence.

In this case the cameras can be written off @ 100% depreciation rate, but it will be treated as asset & will be part of the gross block.