Repairs and Maintenance
Also called: Maintenance Expense
Servicing, spare parts and repairs that keep assets working without extending their life, on the Profit and Loss statement.
In detail
Repairs and Maintenance records the cost of keeping assets working: servicing the scooter, fixing the air conditioner, repainting the office, replacing a laptop battery. The test for this ledger is that the work restores the asset to its normal state; work that extends its life or adds capacity, such as a new engine or an extension, is capitalised through an Asset Repair with Capitalize ticked or a Purchase Invoice to the asset account, and depreciated. The workshop's bill is posted by Purchase Invoice when it carries VAT, or by Journal Entry for a cash mechanic. Repair contracts above Rs 50,000 per invoice attract 1.5 percent TDS as contract payment. Expensing an improvement understates assets; capitalising a repair overstates them.
Formula
Repairs and Maintenance for the period = Service and repair bills that do not extend an asset's life
Accounting entry
| Account | Debit | Credit |
|---|---|---|
| Repairs and Maintenance | Rs 3,500 | |
| Cash | Rs 3,500 |
How to record it in BRAccount
- 01Decide whether the work is a repair, an expense, or an improvement to capitalise.
- 02For an asset on the register, go to Assets > Asset Repair > New, pick the asset and enter the cost.
- 03Otherwise go to Invoicing > Journal Entry > New or Buying > Purchase Invoice > New.
- 04Debit Repairs and Maintenance and credit Cash, the bank or Creditors.
- 05Submit. The entry below posts.
- 06Apply the Nepal TDS - Contract Payment category on the supplier for repair bills above Rs 50,000.
When to use it
Post by Purchase Invoice or Journal Entry for repair bills. Upgrades that add life or capacity go to the asset account instead.
Example from the demo books
Dr Repairs and Maintenance Rs 3,500, Cr Cash Rs 3,500 for servicing the office scooter.