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As 10 query

Pooja Mundra (Article Assistant) (43 Points)

21 July 2014

Helloe Everyone

There is query regarding AS 10

Whether groung rent and dumerage charges will be added to the cost of asset or not?

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CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 21 July 2014

Ground rent not allowed but demmuerage charges yes need to be capitalised.

Pooja Mundra (Article Assistant) (43 Points)
Replied 21 July 2014

IS der any legal background...for the same?

Saurabh Anokhchand Jain (Chartered Accountant) (1043 Points)
Replied 21 July 2014

AS 10 states that the cost of a fixed asset should comprise its purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Demurrage charges are charges in the nature of delayed clearing charges which are charges to be incurred to bring the asset to its working condition for intended use.

Thus it should be capitalized..

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