Capitalisation of assets
This query is : Resolved
08 May 2015
Sir I want to know that if we purchase Windows 8 to upgrade older version than it should be capitalise...????
Or it will be revenue expenditure as it is replacement of item.???
plz clarify me on this.
08 May 2015
In order to categorize an item as a revenue or capital expenditure, you need to consider following points:
1. Whether the expenditure adds value to existing structure.
2. Whether benefits derived from the said expenditure are accrued over a long period of time.
3. or Whether it just gives benefits for the short term.
If points 1 & 2 are applicable, capitalise. Else treat it as revenue expenditure.
1. Whether the expenditure adds value to existing structure.
2. Whether benefits derived from the said expenditure are accrued over a long period of time.
3. or Whether it just gives benefits for the short term.
If points 1 & 2 are applicable, capitalise. Else treat it as revenue expenditure.
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