Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Under which head will the expense on renewal of software be classified?

Rakesh Kalyani (124 Points)

28 March 2019

We have renewed our Tally software license. I want to know under which head should I treat it?

Reply
Follow
Share

20 Replies

ashish agrawal (CHARTERED ACCOUNTANT) (41 Points)
Replied 28 March 2019

rate fee and taxes

Upgrade to CAclubindia Pro. Subscribe Now!

Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 28 March 2019

capitalize it under the respective head under fixed assets

1 Like

Ashish Kachhawa (articles) (483 Points)
Replied 28 March 2019

charge it to computer maintenance expense.

1 Like

Sahil Jain (FAFD, DISA, CA) (Practicing Chartered Accountant ) (2476 Points)
Replied 28 March 2019

Renewal of Tally software license is renewal charges which is to be paid every year and it is valid for a period of 1 year only.
Hence it will not be treated as Capital expenditure and will be treated as Revenue expenditure.
Also same will be booked as subscripttion charges or license renewal charges under head indirect expenses.

1 Like

Kalyani (Chartered Accountant) (181 Points)
Replied 29 March 2019

For Tally software, renewal fees will be paid every year. It is revenue in nature. It comes under the head Indirect expenses.

Upgrade to CAclubindia Pro. Subscribe Now!

CA Manish Jathliya (Professional) (401 Points)
Replied 29 March 2019

IT will be Expenses only and will booked under INDIRECT EXPENSES like -Subscripttion fees, Renewal Charges.

however if you are paying fees for more than one year than you can booked proportionate Expenses and transfer balance to PREPAID Expenses.

(Guest)

you can debit the amount to Annual Maintainace Cost (AMC) Expenses under indirect expenses

shahyar husain (1240 Points)
Replied 10 November 2020

Will repainting of a factory premises be considered as a capital expenditure?

Rustam Baisla Gujjar (4 Points)
Replied 22 December 2020

if company purchased online naukri portal so where can we show under expenses head in income statement.

M Venkat (CA finalist) (456 Points)
Replied 08 January 2021

Tally Renewal expenses are revenue in nature can be classified as Accounting expenses or AMC under indirect expenses.

Upgrade to CAclubindia Pro. Subscribe Now!

Ritik Chopra (student) (8128 Points)
Replied 13 February 2021

Software renewal charges are revenue in nature so they should be charged as indirect expense under Software renewal charges A/c are any other suitable head.

Soni Kurup (2 Points)
Replied 02 November 2022

We transfer from the old warehouse to the new warehouse, we moved all the materials and we spend about 90,00/-

In which Account I have to select this expense

Ayush (Executive ) (6760 Points)
Replied 06 June 2023

For this expense, you should select an appropriate expense account such as "Moving Expenses" or "Warehouse Relocation Expenses" in your accounting system.