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Set Up Fee

N V Ram (Manager) (272 Points)

30 June 2009

We are paying large amount as set up fee for Factoring Facility, can we amortize. What is the accounting Policy or accounting Standard says ?

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chaitanya cherukuri (Articled Student) (241 Points)
Replied 01 July 2009

if benefit is received for more than one accounting year then capitalise it and claim depreciation. one condition for capitalising a expenditure is that some benefits should arrue to the firm for more than one accounting year. generally setup cost bring some benefits na,... so capitalise it.refer to AS 10 fixed assets for more information.