Dear Murali,

Thanks for asking. Regarding the accounting treatment of interior design, only those expenditure which increases the future benefits of an asset from its previously assessed standard of performance can be added to cost of the asset(AS10). In this case of rented property ,the same is not regarded as fixed asset and also the expenditure on interior design does not qualify as capital expenditure. The same needs to be charged to profit and loss account.

Just one small correction, As per my opinion it should be capitalized, since the benefit which accrues due to such interior decoration is for a more than a year and also there is no requirement in AS 10 to own the asset to capitalize in the books.

Thanks

Acoustic Panel Placement for Home Theater Noise Reduction System

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