Fixed asset capitalisation

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 June 2011 What is the date of capitalsiation of an asset.
Is it the date when an asset is ready for use.
and if yes
is then depreciation charged even when asset is not actually used but was ready to use.

prasad

prasad (Expert)
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02 June 2011 Its the date on which it is put to use is the actual date to be considered for Depreciation under Income Tax Laws.

Under Company Law same date to put to use is to be considered for depreciation

Querist : Anonymous

Querist : Anonymous (Querist)

02 June 2011 but in AS 10 it is written that date till an asset is ready to use all expense should be capitalsied.

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Rakesh Jain

Rakesh Jain (Expert)
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02 June 2011 In both Income tax and Company act, date on which the assest is acutaly put to use, shall be considered as a date of starting of Dep.

the words used in AS 10 "it is written theat date till...." is for the value of capitalisation value. it means if a assets is ready to use on 1 jan 10 and its put to use on 1 march 10 than dep. shall be start from the 1 march 10 but the capitalisation of exp related to such assets will be done only up to 1 jan 10 i.e. borrowing cost etc.

With Regards,