On April 1, 2022, Hello Limited approached a software company for implementation of SAP ERP at its organisation. The cost of implementation of SAP…
CA Intermediate · Advanced Accounting · MTP · September 2026
On April 1, 2022, Hello Limited approached a software company for implementation of SAP ERP at its organisation. The cost of implementation of SAP ERP is ₹ 25,00,000 and the time required is 15 months. The company was also required to pay ₹ 100,000 annually after implementation for maintenance and normal updation of ERP. The implementation work started in June, 2022 and could not be finished in 15 months. The ERP was implemented on May 2024. Due to delay in implementation the vendor refunded ₹ 2,00,000. The Company recognised the intangible asset 'SAP ERP' on September 2023 (15 months from June 2022). After two years, the Company has got the SAP ERP more upgraded with latest version and additional features and functions which also increased its speed and usage to Hello Limited for ₹ 7,00,000. Based on the information given in above Case Scenario, answer the following Question Nos. 8-11
Suggested Answer and Working Notes:
Correct Answer: Option (D)
(iv) May 2024 (When the SAP actually got implemented)
Topics: AS 10, AS 26
Related Questions in this Topic
- A newly set up Private Limited Manufacturing Company has incurred following expenditures for the acquisition of Plant an...
- Cropex Ltd. has the following property but is unsure about how to account for the same: A Tennant House has costed ₹15,...
- Omega Ltd. is preparing its financial statements. A transaction is covered by a specific Accounting Standard, but the fi...
- A Limited had acquired an item of Property, Plant and Equipment on 1 st April, 2022 for ₹ 48,000 lakhs. The following a...
- SBHA Ltd deals in business of manufacturing, purchase and sale of rice. The company has around 56 acres of land as part ...