Capitalisation of fixed assets

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Nitesh Sethiya (Querist)
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12 September 2009 Dear All,

In my one manufacturing unit,which is situated out of the city area I have incurred about Rs. 08.00 Lacs for fencing a electircity line from city to the unit.

What I shoud do I treat this a capital Expenditure and capitalise in Electric installation r treated as deferred revenue expenditure and w/oo in 5 installment.

This is new Industry and estalished in April 2008.

saurabh

saurabh (Expert)
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15 September 2009 My advice would be to capitalize it as the installation cost of the asset- electric installation, as the fencing will remain productive for more than 5 years.