Capital Expenditure

Venkateswara rao attili (Employee) (33 Points)

22 May 2009  

A company purchased an Asset on Installment basis, for Rs 1 crore, it had made an down payment of Rs 10 lakhs and every year it need to pay Rs10 lakhs at the end of the year for 10 years, In the current year the company paid Rs 10 lakhs as installment .

Do we need to consider this amount of Rs 10 lakhs as a Capital Expenditure of the company or just an repayment of liability?

Since As per AS 3 we need to disclose this as investing Activity in Cash Flow Statement

Thanks,

Bhagavan