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    • Question

      XYZ Ltd. buys software for ₹10 lakh, with a license

      period of 3 years. How should it treat this in books?
      A Expense in the first year Correct Answer Incorrect Answer
      B Amortize over 3 years Correct Answer Incorrect Answer
      C Add to general reserves Correct Answer Incorrect Answer
      D Capitalize as goodwill Correct Answer Incorrect Answer

      Solution

      Intangible assets like software are amortized over useful life (as per Ind AS 38).

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