Home » IFRS

Capitalization

15 December 2008 4,746 views No Comment
Dear friends,

Can you please give your opinion for the capitalization of the followings:

Modification to Existing Car Park
Construction of Temporary Car Park
Refurnish-Cooling Tower

Thanks

Hemant



Dear

I think that all of these costs should be capitalized.


Hesham



I agree with Hesham, it is to be capitalised, modification & refurnishing
extends the life of the existing asset, thus providing future benefits.& for Construction of Temporary Car Park, it is to be seen as to how
temporary is the car park. If it does not give you future benefits, like a
park for a couple of months, I think it should be charged to P&L

Krishnendu



dear hemant,

surely, below metioned will be considerd as assets & subject to
capitalization.

Regards,
ammad



Dear Hemant,
 
Just check two things,
 
Materiality
Economic Life
 
If economic life of these transaction is more then 1 year you can capitalize by keeping in mind the materiality concept.
 
Economic life of some item may be more then one year, yet some organizations tend not to capitalize their cost owing to the fact that cost of these items are immaterial e.g. simple Calculators.
 
Hope Answer the question.
 
Regards,
 

Aamir

 

 

 

1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading ... Loading ...

Leave your response!

You must be logged in to post a comment.