Deff. Revenue Expenditure
This query is : Open
15 September 2010
Dear Experts,
A Pvt. Ltd. co. is setting up its factory in a remote area where no electric connection is available. The co. has incurred Rs. 458220/- to bring electric connection to its factory area and for setting up of electric poles.
What shuold be the accounting for above expenditure.
Whether it should be treated as deferred revenue expenditure, and if yes, what amount should be written off during the year and in how many years.
The factory is still under construction.
Regds,
A Pvt. Ltd. co. is setting up its factory in a remote area where no electric connection is available. The co. has incurred Rs. 458220/- to bring electric connection to its factory area and for setting up of electric poles.
What shuold be the accounting for above expenditure.
Whether it should be treated as deferred revenue expenditure, and if yes, what amount should be written off during the year and in how many years.
The factory is still under construction.
Regds,
15 September 2010
Ref AS 26: Are the following criteria met?
(i)Identifiability
(ii)Control over the asset
(iii)Future economic benefits
(iv)Cost can be measured reliably
If yes,then the expenditure can be recognised as deferred revenue expenditure.The amortisation (writing off)of the expenditure will be over,
(a) the best estimate of its useful life?
(b)If not as per (a), over 10 years?
(c)If not as per (a) or (b), then as per persuasive evidence that the useful life is longer than ten years
(i)Identifiability
(ii)Control over the asset
(iii)Future economic benefits
(iv)Cost can be measured reliably
If yes,then the expenditure can be recognised as deferred revenue expenditure.The amortisation (writing off)of the expenditure will be over,
(a) the best estimate of its useful life?
(b)If not as per (a), over 10 years?
(c)If not as per (a) or (b), then as per persuasive evidence that the useful life is longer than ten years
15 September 2010
when will the amortisation begin, the co. has not statrted its business operation during the year.
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
- REGARDING GST ON COMMERICIAL PROPERTY
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- TDS U/S. 194NF
- 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
- TDS deduction (debit notes)
- Can a partnership firm become partner in a LLP ?
- 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
- TDS on purchase of value vouchers for employees ?
- 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 ?
Trending Online Classes
CAclubindia
