02-10-2010, 10:21 PM
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by noor4794</i>
<br /><blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Dard</i>
<br />There are two criterias
for the capitalisation of assets and related costs
=> The economic benefits will into the entity by the use of the asset
=> The cost can be measured reliably
As per my knowledge, vehicle registration fulfills these two criterias and should therefore be capitalised
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How do vehicle registration charges meet with first criteria... How can you identify that economic benefits are flowing to entity....
Registration charges are assosiated costs, my main question is that whether these be included in COST of vehicle or treated as expense for the year... Hope you got my question..
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If the vehicles are not registered, they can't be used further. Future Cash or cash equivalents will flow to the entity if the Vehicles(assets) are used. Therefore the cost of registration will NOT be expensed to the income statement. This is my view. Other PpL's view may differ
<br /><blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Dard</i>
<br />There are two criterias
for the capitalisation of assets and related costs
=> The economic benefits will into the entity by the use of the asset
=> The cost can be measured reliably
As per my knowledge, vehicle registration fulfills these two criterias and should therefore be capitalised
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
How do vehicle registration charges meet with first criteria... How can you identify that economic benefits are flowing to entity....
Registration charges are assosiated costs, my main question is that whether these be included in COST of vehicle or treated as expense for the year... Hope you got my question..
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
If the vehicles are not registered, they can't be used further. Future Cash or cash equivalents will flow to the entity if the Vehicles(assets) are used. Therefore the cost of registration will NOT be expensed to the income statement. This is my view. Other PpL's view may differ
