27 December 2010
If you construct more space(Building) it will treated as New Building Construction and increse the value of Assets(Factory), you can charge Depriciation on it, but if you renovate only old building book it as repair and maintenance A/c.
17 April 2011
This is a Thumb rule in case of Capitalising any Expense i.e. If Your Capacity is Increasing (Production of Goods or Services) / Increase in Shop Floor Squarefeet Area etc. to Produce Extra (i.e. In Addition to Old Capacity) only in these Cases you can Capitalise the Expenditure. Otherwise Book it in PnL A/c as Revenue Expense as Repair and Maintenance Cost.
25 June 2011
Obviously, You are Recreating an Assets which is going to USe to Generate Income out of it You Should Capitalize the same. It will Not be regarded as your business Income Beecause running that factory is your usual course of Business, while giving an building asset on rent Attracts Income from House Property. CA SAP DISA DIRM Manish J. Agrawal