Freight capitalization & Freight settlement

[Former Member]

Hi Guru,

i am asking very basic question which is not clear to me that what is difference  freight capitalization  & freight settlement.

thanks,

Raj

[ajaycwa1981 · Accepted solution]

Hi Raj

Capitalization means loading the freight on the inventory / asset

Settlement means not loading it as above, but simply treating it as an expense and charge off to a cost center

Br. Ajay M

[former_member228400]

Hello,

As Ajay said:

One has to do with settlement with your suppliers or carriers (expense account, cost element, ...)- freight settlement -

The other has to do qith sending the cost to an asset that will be depreciated in the future -  freight capitalization -

Regards.