In which expense we book the expense related to certification of ISO 9001 certi

In which expense we book the expense related to
certification of ISO 9001 certificate & consultant fee.

Question Posted / lokeshkhintolia

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In which expense we book the expense related to certification of ISO 9001 certificate & consult..

Answer / h.r. sreepada bhagi

It can be booked in 'Legal & Professional Charges' A/c under
Expenses. This will be charged off to P&L A/c of the
relevant period.

However, if the expense is very huge & will impact the P&L
A/c of the year of expense, it can be deferred for more than
one year also.under the head 'Deferred Revenue Expenditure'.
Balance not charged off at the end of the accounting period
will be shown in the Balance Sheet under 'Miscellaneous
Expenditure' Not written off or adjusted.

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In which expense we book the expense related to certification of ISO 9001 certificate & consult..

Answer / y k agarwal

It should be booked in 'Proffessional Charges A/c' under
the group of Administrative Expenses.

It should not be deffered for the next period(s) even if
the expenses is very high. As per Accouting Standard 26
(Intangible Assests), no expenses other than share issue
expenses and contribution for VRS, shall be defferred.

So it should be charged off directly to P/L account.

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4 Yes

1 No

In which expense we book the expense related to certification of ISO 9001 certificate & consult..

Answer / h.r. sreepada bhagi

AS 26 issued by ICAI deals with Intangible Assets &
Paragraph 54(C)is reproduced below :

53. The cost of an internally generated intangible asset
comprises all expenditure that can be directly attributed,
or allocated on a reasonable and consistent basis, to
creating, producing and making the asset ready for its
intended use. The cost includes, if applicable:

(a)***
(b)***
(c) any expenditure that is directly attributable to
generating the asset, such as fees to register a legal right
and the amortisation of patents and licences that are used
to generate the asset;

The expenditure should be treated as per the above standard
& any other specific standard. The above paragraph should be
read with all other paragraphs of this standard.