Software development

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

12 September 2013 if a pvt limited company which carrying out a business of software development is doing indirect expenses such as rent of the premises, remuneration to director, electricity expenses, etc, then we have to take these expenses in indirect expenses or we have to show them in fixed assets as software develpment expense and capitalize it

Nischit Sanghavi

Nischit Sanghavi (Expert)
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12 September 2013 It should not be capitalised. It shoulb be treated as expenditure and shown in the P&L A/c under proper head.

Querist : Anonymous

Querist : Anonymous (Querist)

12 September 2013 dear nishchit sanghavi,

but according to AS-26 if the company is in development stage then the expenses incurred by the company for the development of software ( intagible assets ) has to be capitalized.
kindly reply

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