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Capitalization of sports equipments

Anmol Singh Arora (Accounts Audit & Tax Assistant) (49 Points)

30 December 2016

Dear All, If a school has purchased sports equipment's such as bat, football, basket ball, football net along with the poles, basket ball pole etc, then whether the same is to be capitalized as fixed asstes or expensed as a revenue expenditure? Further, whether the rate of depreciation applicable as per Income Tax would be 15% as plant & machinery or 100%?

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2 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177732 Points)
Replied 31 December 2016

Generally, replaceble goods with smaller life span like ball, football etc are accounted as revenue expenditure, while nets, poles etc if costing more than 5000/- Rs. are capitallized and depreciated at 15%.

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Anjalii (manager) (22 Points)
Replied 06 July 2023

The useful life of sports equipment should be estimated to determine the depreciation period. This is the period over which the cost of the equipment will be allocated as an expense to match its usage and decrease in value over time. Progress evaluations on a regular basis can monitor their progress throughout the triathlon training program. Adjust the plan to regularly evaluate the progress.