Whether amount paid to Govt organisation capitalised or not?
This query is : Resolved
24 June 2020
Hello Experts,
We are a Manufacture of Electric Vehicle. For getting approval of the vehicles for manufacturing we are required to get the model approved from various organizations like ARAI, ICAT, etc. Only after the approval of such organizations, we can start manufacturing the vehicles. My question is whether such fees paid can we capitalized or are these required to be shown as expenses. Also, we have paid land booking amount for the land allotted by Rajasthan govt. Whether such land booking amount is capitalized or not???
We are a Manufacture of Electric Vehicle. For getting approval of the vehicles for manufacturing we are required to get the model approved from various organizations like ARAI, ICAT, etc. Only after the approval of such organizations, we can start manufacturing the vehicles. My question is whether such fees paid can we capitalized or are these required to be shown as expenses. Also, we have paid land booking amount for the land allotted by Rajasthan govt. Whether such land booking amount is capitalized or not???
25 June 2020
Yes such approval expenses can be capitalised to the model development expenses.
Land booking expenses capitalise to land.
Land booking expenses capitalise to land.
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26 June 2020
Sir can you please explain under which AS does this treatment is possible?? and last year we have shown the same cost as expenses?? can we show the amount now as capitalized??
26 June 2020
Last year you have expensed such expenses continue to expense this year.
04 September 2020
Thank you sir
But can you please mention the provision so that we can explain the director???
And can we cumulatively booked last year exp and current year expenses as assets?? If yes where it is mentioned??
But can you please mention the provision so that we can explain the director???
And can we cumulatively booked last year exp and current year expenses as assets?? If yes where it is mentioned??
04 September 2020
Refer AS 10 accounting standards.
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