JAYANTA KUMAR BANDYOPADHYAY (professional service) (293 Points)
29 August 2013While capitalising a CWIP (in to asset), all religious functions and sweet distribution are being capitalised. But my reading is that this should not be capitalised. please guide me whether my understanding is correct or not with AS .Regards,
CA. Nishant Jain
(Audit Executive)
(411 Points)
Replied 30 August 2013
Dear Jayanta,
Expenses incurred on religious ceremony and sweet distribution should not be capitalised instead the same should be charged to Revenue. As the above expenses does neither create any value addition to the asset nor it increases the efficiency or live of asset.
CA Chirag
(Chirag Sheth & Associates)
(1183 Points)
Replied 20 September 2013
It should not be capitalized at all. The same should be charge at Revenue.
CA Chirag
CA. Mayur
(Service)
(147 Points)
Replied 23 September 2013
As per AS 10, Cost of fixed assets include its purchase price and any attributable cost of bringing the assets to working condition for its inteded use. In case the religious activity expenditure are not incidental to bring the asset the to its intended use than it will be charged to P&L.
CAclubindia
