Software updation expenses

Dhaval (Article) (32 Points)

31 March 2014

A company has paid a large amount around 80 lakhs for the updation of SAP software. What accounting should be done for this?

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5 Replies

Kunal Mittal (FINANCE OFFICER) (580 Points)
Replied 31 March 2014

Open a new account as purchase of Computer Software in fixed assets.

Dhaval (Article) (32 Points)
Replied 31 March 2014

actually client has treated it as computer expenses so is it correct?

C.A.SUNIL HUKKERI (CHARTERED ACCOUNTANT) (58 Points)
Replied 31 March 2014

Seems this will be governed by AS 26 and Intangible assets is recongnised only when following condition are sasified.

1. Identifiability

2. Control over a resoucres and

3. expectation of future economic benefts flowing to entity.

Dhaval (Article) (32 Points)
Replied 31 March 2014

Thank you for your help sir.

Kunal Mittal (FINANCE OFFICER) (580 Points)
Replied 31 March 2014

Agree with Sunil Ji

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