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Capitalisation

Kumaran Nair (Accountant) (37 Points)

07 November 2011

hai,

We have received 25 Electric kettles worth value of Rs.65000/- including all expenses.

kindly tell us can we capitalise the same to avail depreciation benefit

Regards,

Kumaran

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3 Replies

Devendra (Chartered Accountant) (4775 Points)
Replied 07 November 2011

Are those Electric Kettles going to be sold of again?

If no, then you shall capitalize all of them and claim depreciation at the rate 15%.

Regards.

Devendra K

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Anupam Bajaj (Student) (111 Points)
Replied 07 November 2011

ya kettles are not trading material than u can capitalised. Its also depand upon yr internal accounting polices. I think its should be capitalised.

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 11 November 2011

If the kettles are being purchased & are to be used for the purpose of business or profession & are not ordinarly sold in the normal course of business then they need to be capitalised as assets. If you will be earning Income say by way of rent or anything else then you will need to show them as investments.