I need clarification regarding capitalisation of an expenditure, incurred on replacement of part of damaged plant and machineries. For eg 1 VFD of motor is fully damaged and 1 new VFD is being purchased costing Approx Rs 4.50 lacs. Please suggest whether such expenditure can be booked as revenue expenditure (since it is not enhancing the capacity or increasing the original performance of plant and machinery as a whole) or can be caitalised?
Capitalisation of an Expenditure
Ashish Chhawchharia (Chief Manager Finance) (38 Points)
25 May 2011
CAclubindia
