Atharv Sankliya (1354 Points)
09 June 2022
CA. ANKIT PANDYA
(CA)
(682 Points)
Replied 10 June 2022
It should be charged off to P&L as regular maintenance of Truck.
Tyre does not seem to be significant (high value) component of Truck in term of Value in order to fall under component accounting and capitalizing it separately from Truck..
Also, need to check below aspects.
What is the truck used for?
Whether you have capitalized the said truck & tyres separately in your books at the time of Purchase?
Atharv Sankliya
(1354 Points)
Replied 10 June 2022
CA. ANKIT PANDYA
(CA)
(682 Points)
Replied 11 June 2022
So its is part of regular repair & maintenance activity and needs to be charged off.
Atharv Sankliya
(1354 Points)
Replied 11 June 2022
CA. ANKIT PANDYA
(CA)
(682 Points)
Replied 11 June 2022
No, As explained in earlier reply, for separate accounting, a component needs to be of significant value in proportion of the main asset, which is not so in case of Tyre as it is low value and it will be replaced regularly throughout the life of truck.
CA Puja Sharma
(Chartered Accountant)
(5010 Points)
Replied 11 June 2022
Treat as revenue expenditure and charge to P/L A/c.
sabyasachi mukherjee
(27574 Points)
Replied 12 June 2022
Yasaswi Gomes new
(Finance )
(4514 Points)
Replied 12 March 2024
Its not major overhaul, so expense it under maintenance, and depends if it is direct or indirect.
CAclubindia
