Ashish PatelAshish Patel asked 2 years ago
1 Answers
RaviRavi Staff answered 2 years ago

when company incurs repair expenditure 2 things are possible
1. if repairs lead to increase in useful life, capacity or ability to work, cost saving etc (in short is it doing a value addition ore than normally expected) if answer is yes it is capitalised with asset means debited to asset and increase its monetary amount.
2. if it is routine expense to get back asset to its normal track, it is treated as expense, debited to P&L
now whether its 1 or 2 is tricky thing need careful analysis and proper judgement.

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