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is we purchase any software like installation of MS Windows
do we need to capitalize it or post it under head repair &
maintenance A/c?
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Answer / h.r. sreepada bhagi
Any software purchased needs to be capitalized if it can be
identified as a separate asset. In case it is purchased
along with the computer & the value is inseparable, it can
be added to the cost of the computer, but if it's purchased
subsequently, it needs to be accounted as a separate asset.
However, if it's going to be installed on a particular
computer system, it can be added to the value of that
computer also (Software will become an integral part of that
system).
However, if the value of each software is not exceeding
Rs.5000/-, 100% depreciation can be claimed in the year of
purchase & put to use.
| Is This Answer Correct ? | 6 Yes | 1 No |
Answer / dipinder kaur
cost of new software(if forming indispensible part of asset) if bought along with computer should added to computer's cost n thus both to be capitalized.If bought separately then also it should be capitalized.BUT if it is a routine activity to renew the software every year,then it should be debited to p&l account.AND in case of companies,software bought below rs. 5,000 can be 100% depreciated after being capitalized.
| Is This Answer Correct ? | 1 Yes | 0 No |
Answer / geetha
It need not to be capitalized, it can be shown under
computer maintainence account because Computer is an asset
and soft-ware is used to make effective usage of computer.
| Is This Answer Correct ? | 3 Yes | 4 No |
Answer / b.balaramakrishna
We need not to capitalize, we can simply book under
printing & stationery or computer maintenance
| Is This Answer Correct ? | 2 Yes | 5 No |
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