krishnahr13

 Profile Answers by krishnahr13 Questions by krishnahr13

• Jun 28th, 2010

 

If a company purchase plant & machinery for its factory use by investing large amount of money and assume that expected life of P&M is 10 years and which generates revenve for the company more one financial year. Hence this investment cannot be treated expenses for one Financial year therefore same to be kept as fixed asset under P&M head and depricaication will be charged every year based on applicable % & transferred to profit and loss a/c.

Rashmikanta Sahoo

• Oct 30th, 2013

 

Capitalization means to add the value with WDV of the assets .
Here value means the expenditure incurred related to the assets, increase the capacity of assets and it also related to expenditure for essential parts of the assets.

As per AS-16 the interest expenses inured for purchasing the qualified assets is also capitalized .