Const. of premises on the leasehold land of a mining co.
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
27 May 2013
What is the treatment of construction of a house consisting of 2 rooms,1 kitchen, 1 store room constructed on the land taken on lease for 8 years by a mining company and what is the treatment of electrical Fitting done of Rs. 70,000 in the house ?
what will be the treatment of planks which are used in making core boxes to store core in case of a mining company ? The individual cost of core box is upto Rs. 5000 but the aggregate of core box cost will be around 10 lakhs and their life is expected to be more than 5 years if it does not gets infected by termites but probability of infection is there what if the cost
Further, now the mine is sold and we are finalizing the last year accounts in the that case how the treatment of the house constructed last year, electrical fittings and core boxes will be done.
what will be the treatment of planks which are used in making core boxes to store core in case of a mining company ? The individual cost of core box is upto Rs. 5000 but the aggregate of core box cost will be around 10 lakhs and their life is expected to be more than 5 years if it does not gets infected by termites but probability of infection is there what if the cost
Further, now the mine is sold and we are finalizing the last year accounts in the that case how the treatment of the house constructed last year, electrical fittings and core boxes will be done.
28 May 2013
The building will be capitalised when it is constructed and to be written off over the life of the lease (8 years)
The planks can also be charged off over a period of 5 years. You can also argue them to be temporary structures and treat accordingly.
As the mine is sold now, if the considerations involves some portion towards the house or the planks, take them to the respective accounts. If it is not so, charge off the balance in the house and planks to P/L.
The planks can also be charged off over a period of 5 years. You can also argue them to be temporary structures and treat accordingly.
As the mine is sold now, if the considerations involves some portion towards the house or the planks, take them to the respective accounts. If it is not so, charge off the balance in the house and planks to P/L.
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13 July 2013
You have to capitalise all fixed assets and accordingly out of lease rent you are entitled for either 30% or if you are treating the same as business income then depreciatioon.
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