Mohammed Dalal (Chartered Accountant) (163 Points)
01 June 2011Dear All,
One of My clients have imported a Fixed Assets.It has included in the cost of Fixed Assets the hotel bills of the technical engineers called for installation and testing of the Machinery.
Is it proper?
Also are Bank Charges allowed to be capitalised if the same are paid in connection with the P&M
CA Nitu Agarwal
(CA, M.Com)
(266 Points)
Replied 01 June 2011
All the expenses incurred to bring the capital asset into use should be capitalised. So hotel bills paid for technicians will be capitalised.
Bank charges paid are for using the services of the bank, so it can be claimed as revenue expense.
CMA. Rakesh Kataria
(Practising Cost Accountant)
(536 Points)
Replied 01 June 2011
hotel Bills of techinical staff involved in the installation of the machinery will be added in the cost of the machinery
Bank charges will be charged as revenue expeses, but after the IFRS implementation it will be added in the cost of the machinery till the machinery become put to use.
Pothuganty sudheer
(Consultant, C.A, C.S)
(411 Points)
Replied 01 June 2011
I agree with the above posts.
As Hotel expenditure would not have been incurred but for installation which is necessary for bringing the
capital asset into use.
Abishek
(Student)
(1108 Points)
Replied 01 June 2011
Hotel charges , travel charges and refreshment charges of those foreign people should be capitalised to the cost of machinery
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 01 June 2011
all the expenses you have given in question will be capitalised except bank charges
Mukesh Kumar Singh
(CA-FINAL)
(4094 Points)
Replied 02 June 2011
All the expenses you have mentioned in your question must be capitalised.
The hotel bills of the technical engineers called for installation and testing of the Machinery is the expenses of the capital nature that's why after taking reference of AS-10 and AS-16THE ABOVE TREATMENT IS TOTALLY CORRECT
Suraj S
(Audit Executive)
(335 Points)
Replied 03 June 2011
Hi all....
Can u tell me why we can't capitalise bank charges incurred in connection with P&M??
T. MARUTHI VENKATESWARARAO
(DGM - FINANCE & ACCOUNTS)
(21 Points)
Replied 31 May 2012
| Originally posted by : Mohammed Dalal | ||
 |
Dear All, One of My clients have imported a Fixed Assets.It has included in the cost of Fixed Assets the hotel bills of the technical engineers called for installation and testing of the Machinery. Is it proper? Also are Bank Charges allowed to be capitalised if the same are paid in connection with the P&M |
 |
CAclubindia
