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sir ” training to employee and recruiting cost” doesn’t it get capitalised if that training is for the equipment that is extremely specialised.?
Does your employer control you? Are you able to leave your employment and work for someone else?
Well, if you’re not controlled by your employer, you don’t satisfy the definition of an asset so you’re not an asset of the employer and your training costs are expensed, not capitalised
” depreciation of plant used specifically on developing a new produtct can be capitalised as a part of development costs”? sir how this statment is correct.
that depreciation should be spread out and written of in p/l account as expense as well as should be deducted from ”cost of plant’ in SOFP.
so how it is supposed to be capitalised? 🙁 it is deducted from original cost ,isn’t it 🙁
Instead of debiting property, plant and equipment account, we’ll debit development costs account with the cost of the plant
Then, when the project starts to generate revenue, we’ll start writing off those development costs including the plant that was acquired specifically for the development
sir i am confused.. sir does it mean unless the project starts to generate revenue, we added the amortization amount with the cost and debited in SOFP?
We don’t begin to even think about amortisation until the project is up and running ….. so there’s no concept of adding the amortization to the asset! That would make no sense at all
Amortisation isn’t involved at all until revenue is being generated
Ok?
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