Expenditure Revenue Vs Capital

[Guest]

Whether amount paid for plan approval of the building is to be capitalised or to be treated as revenue expenditure.

[CA Rachit Agarwal]

Construction of building includes the planning stage as the first stage and the expenditure for the said purpose should be capitalized.

[CASeetharaman KC]

This definitely needs to be capitalised, as you may be aware that even expenses like transportation upto site is to be capitalised, then there is no problem in capitalising this expense as it is incurred for the creation of the asset itself

AI Summary

Building Plan Approval Costs: Capitalize as Integral to Construction, Aligning with Asset Creation Expenses A discussion on whether the amount paid for building plan approval should be capitalized or treated as revenue expenditure received two replies. Both contributors agreed that the expenditure should be capitalized. One respondent explained that since the planning stage is integral to building construction, the related expenses should be capitalized. The other respondent supported this view, noting that expenses like transportation to the site are capitalized, reinforcing that plan approval costs, incurred for asset creation, should also be capitalized.