Q. Capitalization of Software License

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Question added Feb 20, 2022 Ind AS By Monica, CA, Delhi

The Company has entered into a 5-year contract for use of software. The Cost for the same is Rs.  10 crores.

But the payment will be made in equal instalments over 5 years.

Whether the company can capitalize the cost of Rs. 10 crores in 1st year and amortize the same in 5 years?

Concept by CA Pramod Jain

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