Sumeet (CA Final) (110 Points)
14 March 2012A Co. has purchased a software (MS Ofiice 2010) for all its 20 computers for around Rs. 1,60,000.
Also the co. has taken an insurance on the software for which the co. is paying premium.
Now whether the software should be treated as a revenue expenditure or capital expenditure?
Devendra
(Chartered Accountant)
(4775 Points)
Replied 14 March 2012
I would suggest you to capitalize the Software along with the Insurance and claim depreciation @ 60%.
Regards,
Devendra Kulkarni
Bhargav K
(Senior Associate/Articled assistant)
(40 Points)
Replied 15 March 2012
Software should be capitalised with the Insurance premium paid at the time of purchasing only. Annual premium to be expensed out.
sreenath
(Articled Assistant)
(219 Points)
Replied 16 March 2012
Yes Software Should Be Capitalised and the Insurance Premium Paid should be Expensed in the year in which it is incurred.
deepak
(Chartered Accountant Company Secretary)
(94 Points)
Replied 17 March 2012
It depends !! there are controvercial judgements of HC on the same, If the company u tokin bout is really big , you can expense that out too, but intention of the company should also be kept in the mind in case of capitalization..
CAclubindia
