I have come accross a situation in audit where there has been a significant addition in an asset which has been fully depreciated at the rates specified as per schedule VI. It is to be noted that the original asset is still in operation as it is not necessary that when the asset is fully depreciated, its usage also terminates. This addition forms an integral part of the asset. Due to such addition, the capacity of the asset has increased to a great extent.
Should the amount of addition be conidered as revenue or capital expenditure in the light of AS-10.
CAclubindia
