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Capitalisation

Lakshmi (Article) (171 Points)

19 October 2016

Mr A purchase a shop. He has incurred following expense. can he capitalised following expensed in fixed asset? Property value Rs. 50 lac Parking Charges Rs. 1.5 lac Stamp duty Rs. 2.82 lac demand draft charges Rs. 1600 Please guide

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6 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177852 Points)
Replied 21 October 2016

All others yes, except parking charges.

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Lakshmi (Article) (171 Points)
Replied 22 October 2016

thanks sir for replying... parking charges is 1.5 lac. its one time charges. should we show it in P&L??

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177852 Points)
Replied 22 October 2016

Yes, can be debited to parking charges under P&L acc

Abdul Gazi (Manager (F&A)) (36 Points)
Replied 10 March 2017

Dhiraj sir.. I've q on this
if I purchase a flat for companies guest house purpose and there is also parking space with paid value at one time.. then plz guide hw it will be shown in the books

Sanjay S (Chartered Accountant) (1375 Points)
Replied 10 March 2017

If the terminology 'Parking Charges' implies amount paid towards purchase of dedicated Parking Space for the shop, then you could capitalise it as a Fixed Asset, esp since the parking space will be used for the business.

And it could even be disclosed separately (& not added to Building cost) in balance sheet as Fixed Assets, if the parking space is capable of being sold separately.