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Plz revert if you aware of this

CHIRAG DEEPAK GANATRA (CA FINAL) (1054 Points)

23 August 2012

my client is purchased one shop and also immidiatly paid maintainance charges for 1year of said shop

so can we capitalised that maintainance in the value of shop??????????????

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7 Replies

Chiradeep.R.H (Chirahi & Associates - Consultants) (240 Points)
Replied 23 August 2012

Here Maintainence Charges will be recurring in nature. Again next year shop ownner have to pay the same, So the expenses should be charged off as expenses.

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CHIRAG DEEPAK GANATRA (CA FINAL) (1054 Points)
Replied 23 August 2012

but from next year my client is paid monthly. it is builders policy that first year's maintenance should have to pay on purchase of property.

Chiradeep.R.H (Chirahi & Associates - Consultants) (240 Points)
Replied 23 August 2012

Hi Chirag,

Any maintenance-related expenditure which does not increase the value of the building should be charged off whether the person is paying monthly or yearly.

Maintenance costs allow an asset to continue to be used during its originally established useful life. Maintenance costs are expensed in the period incurred.

Sheena Maheshwari (ARTICLESHIP) (240 Points)
Replied 23 August 2012

Originally posted by : Chiradeep.R.H
	Hi Chirag, Any maintenance-related expenditure which does not increase the value of the building should be charged off whether the person is paying monthly or yearly. Maintenance costs allow an asset to continue to be used during its originally established useful life. Maintenance costs are expensed in the period incurred.