Accounting of fixed assets - computer - Accounts

Accounting of fixed assets - computer

Page no : 2

K.Navya (Student) (23 Points)
Replied 27 October 2013

It is correct that it should be treated as Cap ex, but sometimes it may be treated as Rev ex For example: When it is replaced by harddisk of second hand computer, it may not enhance the capacity of the computer, In such case it is Rev ex..

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Sai Mohan (Mr.) (44 Points)
Replied 27 October 2013

It is Capital expenditure, No computer will work without hard disk or monitor. According to AS-10 Accounting for Fixed assets, a replacement of part which will enhance the useful life of assets can be treated as capital expenditure.

naseef (CA Final, ICWAI Final) (37 Points)
Replied 27 October 2013

As per As 10 fixed asset, The repair expenditure or improvement is made, shall be capitalized only if enhance the capacity and useful life,

so, in the case of replacement of hard disk and monitor will not leads to enhancement of performance and useful life, so it should be treated as revenue expense.

navjot (Account officer) (26 Points)
Replied 27 October 2013

It is capital expenditure.... Its incresing capacity anx life of computer...

CA Shyam Agarwal (Practice) (690 Points)
Replied 27 October 2013

capitalise the new cost of monitor & hard disk bcz it enhance the economic. benefit of computer... but sale value of old monitor and harddisk will reduce the fixed assets

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CA girl (Article Trainee-CA Final) (1942 Points)
Replied 28 October 2013

Originally posted by : Saurabh Maheshwari
	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...

In my opiniion...The capacity of the new hard disk should be compared with the original capacity of the old hard disk and not the depreciated capacity.

CA Vikas Asawa (Chartered Accountant) (25 Points)
Replied 28 October 2013

It should be treated as capital expenditure if value is less than 5000 same can be expensed out

CA. Virander Sharma (Manage Finance) (31 Points)
Replied 28 October 2013

It is not qualify for capitalization of assest because as per as 10 it must enhance the original capacity from as its when itroduce.it is revenue expense and charge it to profit and loss

ketan h shah (lawer) (55 Points)
Replied 28 October 2013

It is capital exp as per hyd bench judgement

juzar ( ) (24 Points)
Replied 28 October 2013

The whole system is not replaced, only a part, hard disk or monitor is replaced. It may be assumed that it is enhancing the capacity. Hence to be capitalized. No need to write off PC.

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juzar ( ) (24 Points)
Replied 28 October 2013

The whole system is not replaced, only a part, hard disk or monitor is replaced. It may be assumed that it is enhancing the capacity. Hence to be capitalized. No need to write off PC.

Bhavya (CA) (26 Points)
Replied 28 October 2013

If the new HDD is with more capacity (increasing the performance) then we can categorize it as Capital Exp.

sandeep bhatt (articles) (23 Points)
Replied 28 October 2013

In my opinion it should be take as capital expenditure because there is improvment in working capacity of fixed asset. That's why it will qualify for capital eaxpenditure

VIKASH KUMAR JAIN (Audit Executive) (711 Points)
Replied 28 October 2013

Its a debatable issue.In my opinion consider the same as capex becoz it obviously increases the life of principle asset i e. cimputer.capex with computer. VIKASH KUMAR JAIN

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Ravi Shankar (Chartered Accountant) (186 Points)
Replied 28 October 2013

Under materiality concept, if the cost is less than Rs. 5000/-, you can write it off to revenue notwithstanding the enhanced capacity etc of the machine.