capitalization.

Ask with details as Where / Which / Who / When

An expense shall be capitalise:
If new asset is acquired,
If new asset is constructed,
If it results in increase in revenue generatin capacity,
If it results in increase in effiviency,
It provides enduring benefit.

Basically capitalise means such expense will be part of cost of asset and will be written off in no. of years, as such expense provide enduring benefit. 

for eg. Wages paid to labour for construcion of building will be debited to building account instead of wages account, installation charges on machinery will be debited to machinery account instead of Installation charges account. 

Originally posted by : Prakash Gehani
	An expense shall be capitalise:If new asset is acquired,If new asset is constructed,If it results in increase in revenue generatin capacity,If it results in increase in effiviency,It provides enduring benefit.Basically capitalise means such expense will be part of cost of asset and will be written off in no. of years, as such expense provide enduring benefit. for eg. Wages paid to labour for construcion of building will be debited to building account instead of wages account, installation charges on machinery will be debited to machinery account instead of Installation charges account.

We pay a consolidated amount to the Contractor and after that contractor pay the wages and reimburse himself for other expenses like cost of material purchased
, then how the accounting effect will be done

capitalise all amount paid to contractor