Hey one factory has completed more than 60% of the compound wall in 3 years. They want to capitalise it. Can they do it?? Balance 40% is pending.......
2 Replies
CA. Kuldeep Singhi
(Entrepreneur)
(424 Points)
Replied 17 February 2014
I think till the time the 40% get completed it should be shown as WIP & then it should be capitalised & depreciation should be charged on it.
Manoj Mehta
(Head Of Department (Accounts & Finance))
(1479 Points)
Replied 03 March 2014
Dear Shivam
Kuldeep is correct but there is another way of capitalising it.
You can show it as completed boundry wall (For 60%) in the current year and you can treat the rest 40% as addition to completed boundry wall in the next year. Hence you will be able to take the benefit of Depriciation in your accounts from current year itself.
I hope it will help you
Regards to you
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