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February 2012

From published accounts

By Himanshu V. Kishnadwala
Chartered Accountant
Reading Time 1 mins
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Compiler’s Note
Companies incur expenditure on construction/development of certain assets to facilitate construction of a project or to subsequently facilitate its operations. Such assets are referred to as ‘Enabling Assets’. The Expert Advisory Committee of ICAI has in an opinion published in January 2011 issue of ‘The Chartered Accountant’ opined that expenditure on such assets cannot be treated as capital expenditure.

ICAI has recently issued an Exposure Draft of Limited Revision to AS-10 ‘Accounting for Fixed Assets’ which when made applicable may have an impact on treatment of such expenditure.

Given below are disclosures of accounting policies followed by some companies in respect of expenditure on such ‘Enabling Assets’.

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From published accounts

FROM THE PRESIDENT