Naveen Kumar (629 Points)
12 July 2021
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 12 July 2021
Capitalize insurance and registration expense as well as part of the cost of the truck.
yasaswi gomes
(My grammar is 💯 good I)
(7290 Points)
Replied 12 July 2021
Yes capitalise registration fee into the carrying amount of the asset as per as10 standard because it does not qualify as an intangible asset because you can control, identify, but there is no future economy mic benefit. That means these charges are depreciated along with asset and not amortised.
Next, insurance contracts for policy holders is an intangible asset which does not fall under the scope of intangible assets for you to amortise after initial capitalisation. It is treated as a financial instrument prepaid insurance.
Prepaid insurance a/c 1000
To Cash a/c 1000
then
Insurance expense a/c 1000
To Prepaid insurance a/c 1000
What is the us of this CMA Poornima when it can be expensed initially as allowable? When the car gets damaged,
its
Debtors a/c
To Insurance claim a/c
here as the carrying value of insurance is not reducing, cedant or insuree treatment is not prescribed.
Balamurali Unnithan MS
(STUDENT)
(1631 Points)
Replied 14 July 2021
Live class on PF & ESI Enrollment & Returns Filing(with recording)
CAclubindia
