there is purchase of tempo for a school and here the school had paid insurance for that tempo... In arriving at fixed asset can we take the amount paid as insurance for cost of fixed asset... pls suggest...
First time Insurance - In case of First time Insurance (Insurance expense incurred at the time of purchase of Asset), then the same can capitalised i.e. it can be added to Fixed asset cost.
Subsequent Insurance renewals - However, in case of renewal Insurance (i,e paid on yearly basis), then it can charged as expenses in Profit & Loss account