TaxTMI 
TaxTMI 
Dear all,
pls share some info on
How to make capitalisation in NEW projects
CAPITALISATION
18 Mar 2017 
8 Replies 
4462 Views Asked by
Capitalisation of project costs: capitalise directly attributable costs when asset is ready for use; otherwise expense them.
Capitalisation requires costs to be held in an Asset under Construction/Work in Progress account and capitalised only when project milestones, engineer inspection or completion evidence show the asset is ready for intended use. Initial costs that are directly attributable-including acquisition, installation, commissioning, allocated direct labour, overheads and borrowing costs-are capitalised until ready for use; subsequent costs are expensed unless they extend useful life, materially improve performance, or replace a major component. Organisational policies and applicable accounting standards must guide consistent treatment and tax credit interactions must be avoided to prevent double benefits. (AI Summary)
Capitalisation requires costs to be held in an Asset under Construction/Work in Progress account and capitalised only when project milestones, engineer inspection or completion evidence show the asset is ready for intended use. Initial costs that are directly attributable-including acquisition, installation, commissioning, allocated direct labour, overheads and borrowing costs-are capitalised until ready for use; subsequent costs are expensed unless they extend useful life, materially improve performance, or replace a major component. Organisational policies and applicable accounting standards must guide consistent treatment and tax credit interactions must be avoided to prevent double benefits. (AI Summary)