Accounting of Electrical Fittings

[Surya Moorthy]

Good evening everybody,

          I need one clarification for accounting of electical fittings. If I have purchased one Machinery then how can i account the electrical fittings like cable, switches, A/C, Cabin related to that machine. Whether accounted with the machine(value of machine will be increased) or separately grouped under Plant & Machinery head?

                 Please solve my doubt.

[Deepak Nagori]

Dear Surya,

Value of cable and switches can be added to the cost of the machine but A/c needs to be accounted as Furniture and Cabin as building.

Regards

CA Deepak Nagori

[Deepak Nagori]

Dear Surya,

Cable and switches are part of P&M. A/C has to be accounted for as furniture. Cabin is to be accounted as Building.

Regards

CA Deepak Nagori

[Surya Moorthy]

Thank You Mr. Deepak

[Vivek Harsh]

If such item improves the efficiency of machine such amount to be capitalized. On contrary they can also be treated of Revenue nature and claimed as deduction.

[Vivek Harsh]

However A/C needs to be capitalized.

[Vivek Harsh]

However A/C needs to be capitalized.

AI Summary

Guidance on Accounting: Cables and Switches as Machine Costs, A/C as Furniture, Cabins as Buildings A participant sought clarification on how to account for electrical fittings related to machinery, such as cables, switches, A/C, and cabins. A respondent advised that cables and switches should be added to the machine's cost, while A/C should be classified as furniture and cabins as buildings. Another contributor suggested that if the fittings improve the machine's efficiency, they should be capitalized; otherwise, they could be treated as revenue expenses. The original poster expressed gratitude for the guidance received.