Fixed Asset

388 views 2 replies

Compay has constructed building.  Contract is given for construction of Building which includes  following :

Nature of Work                     Amount                                         Classification

 

CiVIl                                    Rs. 10,00,00,000.00                                Building

Electrical                             Rs.     50,00,000.00                          Electrical Installation

HVAC                                  Rs. 60,50,000.00                            Electrical Installation         

Fire Fighting                     Rs. 25,65,000.00                           Electrical Installation

Plumbing                              Rs. 60,95,000.00                         Building

Lighting Protection System   Rs. 45,00,000.00       Electrical Installation

Elevator                                      Rs. 50,00,000.00      Electrical Installation

Please let me know while capitalising whether all above items need to be capitalised as building or they should be capitalised as per asset classification given above.

 

 

 

Replies (2)
I think all the above items should be capitalised as building.....

According to my view, they all are different assets, The reason is very simple..

The contract for the Items noted above given individually, If it is only the 1 Contract, then It can form the part of building otherwise not…

Let’s understand the situation by way of example..

I have constructed the Building …

At the same time I have ordered for the Furniture of the Building too.

Now, When It gets completed, I will have two fixed assets because I have executed 2 Contracts. The same case is here…

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