Capitalisation of Expenditure
This query is : Open
22 January 2009
X ltd having Computer Worth rs. 25000 in balance sheet during the year x ltd paid rs. 6900 for purchase of software, Rs. 2500 for the maintainance of website, Rs. 3690 purchase of ram, so shall X ltd have to capitalise Rs. 6900 if yes then what is the rate of depreciation in companies act and in cometax act.
22 January 2009
1) How do we close books ?
2) what do u mean by Accumilated Deprecion
2) what do u mean by Accumilated Deprecion
22 January 2009
By passing theclosing entries and adjusted entries you can close your books of accounts.
22 January 2009
As regards software, capitalization is stillan subjective matter ecen in practical life...
Many capitalize it & many write it off.
Fact is that U never purchase a software. U just purchase rights / license...
It depends on nature of software.
It its totally new software & needed to run computer, then it will be capitalised with computer & if seperately purchased (as in ur case), then it will be capitalised (depending on nature of software) & it will be armotized over useful life. AS 26 says 3-5years are sufficient...
But softwares like SAP ERP can be armotized over many years as cost runs into crores.
Many capitalize it & many write it off.
Fact is that U never purchase a software. U just purchase rights / license...
It depends on nature of software.
It its totally new software & needed to run computer, then it will be capitalised with computer & if seperately purchased (as in ur case), then it will be capitalised (depending on nature of software) & it will be armotized over useful life. AS 26 says 3-5years are sufficient...
But softwares like SAP ERP can be armotized over many years as cost runs into crores.
22 January 2009
Accumlated depreciation is the total depreciation charged from inception
24 January 2009
Dear Ajay,
As per the given facts,
As per AS- 10, the expenditure which increases the efficiency of the assets as compared to inital efficiency will be capialised.
As per Indian GAAP. If the software is such that which are required to run a computer, then it will be capitalised as Computer.
if a separate software, then it will be dealt by AS- 26.
AS per companies act, the assets which are of Rs. 5000 or less shall not be capitalised.
amarpal@icai.org
As per the given facts,
As per AS- 10, the expenditure which increases the efficiency of the assets as compared to inital efficiency will be capialised.
As per Indian GAAP. If the software is such that which are required to run a computer, then it will be capitalised as Computer.
if a separate software, then it will be dealt by AS- 26.
AS per companies act, the assets which are of Rs. 5000 or less shall not be capitalised.
amarpal@icai.org
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- REGARDING GST ON COMMERICIAL PROPERTY
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- TDS U/S. 194NF
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- ITC temporary reversal and reclaim
- GST on export of services and Input Credit
- Applicable TDS rate for sale of property in Nov 2024
- Donation Receipt u/s 80G
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
Trending Online Classes
CAclubindia
