Capitilisation of fixed asset

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Querist : Anonymous

Querist : Anonymous (Querist)

24 April 2013 A COMPANY IS PURCHASE ON SOFTWARE FOR RS 13500 . SO COMPANY CAPITALIZED ON SOFTWARE AS A FIXED ASSET OR NOT IF COMPANY IS CAPITALIZED THEN THE RATE OF DEPRECIATION OR IF NOT CAPITALIZED THEN WRITTEN OFF IN P & L SO PLEASE ADVICE.

CA Vikas Acharya

CA Vikas Acharya (Expert)
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24 April 2013 as per AS 26, software is intangible asset.
book them as asset.
such assets are never depreciated but Amortized.
amortization period in case of software is 3-5 years, normally it is 10 years for intangible assets. para-63
amortisation method--
in proportion of future benefits
or
SLM method. (simple as in case of DEP)