Nutan Kumar (Article assistant) (58 Points)
31 May 2013Dear Sirs/Madam
A company has commenced its commercial operation on September 9 2012. Expenses incurred upto Sep 8 2012 directly relating to assest are being captlised by transfering CWIP to Assest account. Some of the expenses incurred before to commencement but bills are received from contractor commencement. Wether these expnese can be captlised (added to assest account). ?
Rahul Jalan
(Chartered Accountant)
(121 Points)
Replied 31 May 2013
payal gupta
(ca final student)
(482 Points)
Replied 31 May 2013
| Originally posted by : Rahul Jalan | ||
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Yes, it should be capitalized... Late receipt of bill cannot alter the nature of expenses... |
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Rohit Aggarwal
(ACA Bcom (H) MBA MCom)
(470 Points)
Replied 31 May 2013
Yes the expenses will be capitalized but the burden of proof depends upon the assessee.
Further, If the date of invoice is after the date of commencement of business also in that case you can capitalise it according to Accounting Standard 10 which state the expenses incurred on Capital Asset for its installation are capitalised.
Thanks.
CAclubindia
