How to account for the hotel's payment for the central air-conditioning cable reconstruction project?

Accounting treatment of hotel's payment for central air conditioning cable reconstruction project;

Borrow: management fee

Taxes payable-VAT payable (input tax)

Loans: bank deposits

Subsequent expenditure on fixed assets refers to expenditure on renovation and repair, etc. Occurred during the use of fixed assets. The principles for handling subsequent expenditures are as follows: those that meet the conditions for confirmation of fixed assets are included in the cost of fixed assets, and the book value of the replaced part is deducted; Those that do not meet the conditions for the recognition of fixed assets shall be included in the current profits and losses.

(1) capitalized subsequent expenditures

When the subsequent expenditure of capitalization of fixed assets occurs, enterprises should generally write off the original price of fixed assets, make provision for accumulated depreciation and impairment, transfer the book value of fixed assets to projects under construction, and stop making provision for depreciation. Subsequent expenditures shall be accounted for with the subject of "construction in progress". When the subsequent expenditure of fixed assets is completed and reaches the intended usable state, it will be converted from construction in progress to fixed assets, and depreciation will be accrued according to the re-determined service life, estimated net salvage value and depreciation method.

Some subsequent expenditures on fixed assets incurred by enterprises may involve replacing part of the original fixed assets. Subsequent expenditures shall be included in the cost of fixed assets, and the book value of the replaced part shall be deducted. This can prevent the cost of replacement parts and the cost of replaced parts from being included in the cost of fixed assets at the same time, resulting in double calculation of the cost of fixed assets. Major repair expenses incurred by enterprises in regular inspection of fixed assets can be included in the cost of fixed assets if there is conclusive evidence to prove that they meet the conditions for confirmation of fixed assets. If they do not meet the conditions for confirmation of fixed assets, they should be expensed and included in the current profits and losses. Fixed assets shall be depreciated during regular overhaul.

(B) the cost of subsequent expenditures

Subsequent expenditures related to fixed assets, such as repair expenses, which do not meet the conditions for confirmation of fixed assets, are included in the current management expenses or sales expenses according to different situations when they occur.

Under normal circumstances, after the fixed assets are put into use, due to the wear and tear of the fixed assets and the different durability of each component, it may cause local damage to the fixed assets. In order to maintain the normal operation and use of fixed assets and give full play to their use efficiency, enterprises will carry out necessary maintenance of fixed assets. The daily repair costs of fixed assets shall be directly included in the current profits and losses when incurred. Follow-up expenses such as fixed assets repair expenses incurred by production workshops (departments) and administrative departments of enterprises are included in "management expenses"; Where an enterprise has a special sales organization, the follow-up expenses such as the repair expenses of fixed assets related to the special sales organization shall be included in the "sales expenses". If the expenditure on the renovation of fixed assets does not meet the conditions for the confirmation of fixed assets, it will be directly included in the current profit and loss when it occurs.