Capitalisation of Pre Operative Expenses

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Prem Kumar Bajaj (Querist)
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22 August 2008 Can Salaries and other expenses incurred by a company for its expansion project be capitalised. If yes, whether a part of the salaries can be capitalised and the balance be charged to Profit and Loss Account

Yatesh Prakash Renuke

Yatesh Prakash Renuke (Expert)
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22 August 2008 Hi !

Directly attributable cost is to be capitalised. like Site Preparation, Initial Delivery/Handling Cost, Installation Cost, Professional Fees.

Administration Chg & other chg are generally excluded because they do not relate to specific fixed assets. But in some cases where cost is identificable & incurred for the asset to put it in working condition, then it can be capitalised.

Regards'

Yatesh Renuke.