Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

capitalize

Anush Ram (160 Points)

03 August 2018

every one saying"you haven't capitalised that expense!"
what does it mean?

Reply
Follow
Share

6 Replies

RAJA P M ("Do the Right Thing...!!!") (127921 Points)
Replied 03 August 2018

That Expense means what...?

Upgrade to CAclubindia Pro. Subscribe Now!

Anush Ram (160 Points)
Replied 03 August 2018

sir!....huh!!!!....I mean "any expense"

Prakash Gehani (Consultant & Teacher(Whatsapp 8718057907)) (1306 Points)
Replied 04 August 2018

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.

1 Like

Anush Ram (160 Points)
Replied 04 August 2018

Thank you so much!!!!
I got some idea, after reading this

1 Like

brijesh kumar (student) (61 Points)
Replied 04 August 2018

First of all you should learn about the revenue nature and capital nature of expenses or income then you understand better these

Upgrade to CAclubindia Pro. Subscribe Now!

RAJA P M ("Do the Right Thing...!!!") (127921 Points)
Replied 04 August 2018

@ Brijesh Kumar.,

What You say here to the Query...?
Can anybody criticise to others but result will be required to the query...!!!

If you have details then post/reply to query...
If not then wait or go to get details and post here...

But, Don't be ignored members... 🤐