Question ID : 568
Nature of treatment of Developement expenditure
The Company is an EOU with a domic division.They are vovled software, hardware & firmware devt.For a contract recd valug Rs.1.25 cr,developemnt expenses amountg to Rs.33 cs has been spent.The expertise knowledge acqd from the project can be applied on other simir projects for which the Company has recd other simir contracts also.
Can this expenditure be regarded as Devt expenses and be amortised over a 10 year period as per AS-26?
Under the I.T.Act,nature of treatment to be done? Can it be regarded as tangible Asset and cim 25% depn or write off the entire amount?
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