Sorabh Gupta (Manager ( Taxation )) (877 Points)
10 June 2009Dear All
What is included in capitalised amount of asset..........
Like if before purchase a assest i got the service of consultant for that particular asset then , would that expenses be capitalised...................
And would insurance expenses will be capitalise along with the cost of asset.
Jyoti Malik
(ACCOUNTANT)
(2644 Points)
Replied 10 June 2009
Yes, insurance expenses will be capitalise along with the cost of asset.
Sorabh Gupta
(Manager ( Taxation ))
(877 Points)
Replied 10 June 2009
Will it be the first insurance OR some thing else ...............
And what about Consultant fees,,,,,,,,,,,,,,,,,,,,,,,
Jyoti Malik
(ACCOUNTANT)
(2644 Points)
Replied 10 June 2009
Sorry No Idea about consultant fee..........
First Insurance will be capitalize
RAMANJU
(here to updating the knowledge)
(485 Points)
Replied 10 June 2009
Arindam Roy
(ERP - Financial consultant)
(38 Points)
Replied 10 June 2009
.Yes, Consultant fees paid before the asset put into use should be capitalised
. Cost of the asset include Purchase price + Other Incidental cost (Capitalised portion of Insurance expenses)
anil Kabra
(CA, CS INTER)
(40 Points)
Replied 10 June 2009
All the expenses incurred before the assets put to use should be capitalised either it is Insurance or consultancy fees. but it should be one time payment .Similarly Interest on loan taken for purchasing an assets will not be part of cost as at regular interval interest payment will be made, So this exp. will charged to revenue Expenditure
RAMANJU
(here to updating the knowledge)
(485 Points)
Replied 10 June 2009
Aditya Maheshwari
(CA in Practice)
(35867 Points)
Replied 10 June 2009
Here the question asked is whether the insurance & consultancy charges can be capitalised or not. The answer is only first insurance premium paid & consultancy charges are to be capitalised.
Borrowing cost is to be capitalised only if the gestation period is long and it takes a asset long time to be put to use.
chintan mehta
(Chartered Accountant)
(445 Points)
Replied 10 June 2009
all costs need to be captilised.
anil Kabra
(CA, CS INTER)
(40 Points)
Replied 11 June 2009
Mr.Ramanju I am agree only that Borrowing cost should be capitalised only in that assets which will take long time to become an assets. otherwise borrowing cost shold not be capitalised.
CA Amit Kumar Khaitan
(Research Analyst)
(360 Points)
Replied 12 June 2009
is the treatment same for both accounts and Tax??
Tarun Gupta
(18 Points)
Replied 20 June 2009
Sir,
only the expenses incurred till the asset is READY TO USE (NOT PUT TO USE) is to be capitalised in books of accounts as per AS-10.
BUT IN TAXATION EXP. INCURRED TILL ASSET IS PUT TO USE WILL BE INCLUDED IN ACTUAL COST (EXPL.8 TO SEC.43(1))
CAclubindia
