Doubt regarding treatment

529 views 2 replies

Please resolve my doubt:

If a company purchases few laptops and along with it, purchases an extended warranty of 3 years for each of them, should the cost of extended warranty be capitalized or expensed off?

( Note: Laptops and extended warranties have been purchased from the same dealer but 2 different invoices have been raised )

Thanks in advance!

Replies (2)
cost on extended warranty should be treated as revenue expenditure

Dear

 

Normally we use to a/c under AMC expenses for those warranty items.

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