Bhaskar Unnikrishnan CPA CMA (Accounts / Administration) (414 Points)
29 November 2012What is the tretment for Major cost for restructuring a line of production or distribution which will give significant future economic gains. For Example, in 2012, a firm planning restructure its supply chain management, estimating that it will take 5 years to complete the entire process and cost Rs.10,000,000 per year including all costs.
Please advise.
Thanks
Anil Sankar V
(CA)
(1877 Points)
Replied 29 November 2012
Defer the expenditure for certain years,depending on the materiality(as it varies from co. to co.) and procedures of the company
Nithin Chettoor
(Assistant Manager)
(388 Points)
Replied 29 November 2012
This has to be put in WIP and on the year of completion of the restructuing, the same has to be capitalised.
Bhaskar Unnikrishnan CPA CMA
(Accounts / Administration)
(414 Points)
Replied 29 November 2012
| Originally posted by : forhistory | ||
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Defer the expenditure for certain years,depending on the materiality(as it varies from co. to co.) and procedures of the company |
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A treatment of creating a provision and release yearly expense against these provision can be accepted in such situation? Can you give me a narrative details please.
Thanks
CAclubindia
