HI, Whether Purchase of Ram, UPS is a capital expenditure or Revenue Expenditure?
Capital expenditure or revenue expenditure
Ritesh Kumar Udaipuria (Article Assistant) (25 Points)
28 June 2014Ritesh Kumar Udaipuria (Article Assistant) (25 Points)
28 June 2014HI, Whether Purchase of Ram, UPS is a capital expenditure or Revenue Expenditure?
CA. Roopali Kadam
(Jobs on assignment basis.)
(1458 Points)
Replied 28 June 2014
If amount is immaterial. can show as Revenue expense
sumit
(Self Employed with GST Working)
(57 Points)
Replied 28 June 2014
Ritesh,
Purchase a UPS is a CAPITAL Expenditure whereas purchase of RAM is a Revenue Expenditure and I have a question from Roopali, Please tell me what do you mean by "if amount is immaterial"
CA Saroj Kumar
(Keen to learn something new every moments)
(2588 Points)
Replied 28 June 2014
sumit is right.................
CA. Roopali Kadam
(Jobs on assignment basis.)
(1458 Points)
Replied 29 June 2014
P26.
CA Saroj Kumar
(Keen to learn something new every moments)
(2588 Points)
Replied 29 June 2014
CA. Roopali Kadam
(Jobs on assignment basis.)
(1458 Points)
Replied 29 June 2014
https://icai.org/resource_file/13133Annexure-I_AASB_25092008.pdf
Ref. Para 5.Guidance Note are recommendatory in nature.A member should ordinarily follow recommendations in a guidance note, else disclosure may require
CA. Roopali Kadam
(Jobs on assignment basis.)
(1458 Points)
Replied 29 June 2014
As 10 Para 8.1 Identification of Fixed Assets.
"An enterprise may decide to expense an item which could otherwise have been included as fixed asset, because the amount of expenditure is not-material "
CA. Roopali Kadam
(Jobs on assignment basis.)
(1458 Points)
Replied 29 June 2014
& capital Expenditure is also defined in Guidance Note (Recommendatory in nature). Is it defined in any AS?
CA Saroj Kumar
(Keen to learn something new every moments)
(2588 Points)
Replied 30 June 2014
Capital expenditures (CAPEX or capex) are expenditures creating future benefits. A capital expenditure is incurred when a business spends money either to buy fixed assets or to add to the value of an existing fixed asset with a useful life extending beyond one year.
CA. Roopali Kadam
(Jobs on assignment basis.)
(1458 Points)
Replied 30 June 2014
Have you seen any Calculator A/c as Fixed Asset in any books?
jatin aswani
(ARTICLE ASSISTANT)
(102 Points)
Replied 30 June 2014
Aum Maheta
(none yet)
(216 Points)
Replied 30 June 2014
If Ram Purchased is of higher capacity as compared to previous one, Can't v classify it as capital exp., since such higher capacity ram will enhance processing speed... thereby increasing processing capacity ...and yaa wht rate of depn u will apply on ups, as in one case study i saw if ups is integral part of comp. system where computer operations couldn't be carried on without d use of ups then 60% rate will apply....else treated as machinery (15%)...
Amit Jakhwal
(Article Assistant)
(49 Points)
Replied 30 June 2014
Sahil Bhatia
(Practicing Chartered Accountant)
(290 Points)
Replied 30 June 2014
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