Accounting of fixed assets - computer

No it will be treated as Capital Expenditure....because Hard disk and monitor replacement will enhance the previously assessed working capacity of system

What if the new hard disk and the monitor are exactly of the same type that was used earlier?? In that case it would just replace the existing hardware...there is no enhancement in the capacity of the computer right?

See Divya...the system with new hard disk will work better than that with old hard disk...thats why there is improvement in capacity and the cost for such replacement(improvement) can be capitalised...

 

if such expenditure enhances the performance or increases the life of the asset then such expenses should be Capitalized...

or Else charged to Profit/loss A/c.

In Openion Replacement of hard disk or a moniter in a computer doesnot quality for accounting under fixed assets because it s a revenue expenditure and the benifit of such expenses cannot be treated as fixed expenses

it is a revenue expenditure 

Revenue expenditure

if it  is  specifically mentioned in question capactiy will be  enhanced then take it as capex otherwise take it  as revenue expense. dont be confused.

 

You have to write off old PC and capitalise

If capacity of the principal asset is enhanced by the expenditure than we should have to capitalised that expenditure for eg:-if in old hard disk(previous hard disk) ,storage capacity is 40gb But in new it is 80gb than we should have to capitalised it But if the storage capacity is same as old harddisk ie.,40 gb than no need to capitalized the expense

Revenue expenses....

It ll be capital expenditure bcoz it replaced major part and enhance capacity of computer to work faster and better.

Replacement of hard disk do not enhance the computing power of a pc,in the above case if a server is being maintained for running an accounting software and addition o hard disk increases the storage capacity then treat it as capital expenditure,usually hard disk fails rarely And are usually covered by warranty for a periodof 3+ years and are replaced free of cost. So in the above scenario it is better if it is treated as revenue expenditure as cost of hard disk rarely crosses 10% of the cost of the computer.The same yard stick can be used for monitor too depending on the reason and the cost incurred in replacing the monitor.

its nothing just an replacement of old component of an asset with new component having latest config.. so it should be in revenue nature.