Cost of Fixed Asset

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shreesha n (Querist)
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25 May 2010 1.Please let me know whether the cost of fixed assets includes expenses like transportation charges to bring that asset into factory premises that is directly attributable to the cost of that asset.
2.If yes is it right to claim the depreciation on such expenses also included in the cost?
3.If the asset is revalued in the next year itself whether such expenses will also be considered in the cost of asset or only the cost related to the asset will be taken. Please clarify me in this regard.

Guest

Guest (Expert)

25 May 2010 In the case of fixed assets (AS 10), all the expenditure incidental to acquiring the asset is treated as cost, and includes borrowing costs also as per AS 16. In addition to borrowing costs, the term ‘cost’ would include: purchase consideration; cost of accessories; stamp duty, registration, etc; transport costs in case of movable assets; transit insurance; all the expenditure directly incurred to acquire the asset such as travel, inspection, duties and taxes (to the extent they are not recoverable).

So it will be included.
2. Yes
3. Yes

CA Shiv

CA Shiv (Expert)
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25 May 2010 yes i agreee..

for 3. once you consider it cost of fixed asset and u capitalise it than in future years you cant separate it for any purpose... u can depreciate,revalue etc on the total cost only....so from next year forget about separation...

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