29 May 2010
Dear Dhaval, Your view of non capitalisation of support services is correct.
You can understand it like - support service is a maintenance charges.
The Asset is required to be capitalised at that time when it is ready to be used and once it is capitalised all other expenses incurred in respect of it will only be capitalised if it enhance its useful life or working ability.
In your case once the software has been capitalised, the support services that will be provided afterwards is only for the smooth functioning of the ERP previouly implemented it will not add anything further to it. Hence, any amount paid towards support services should not be capitalised.