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As16

rajeev (nnnone) (222 Points)

18 May 2014

Dear Friends, loan taken for purchase of truck but till date delivery of truck not received, my question is thatthe interest on loan should be capitalised or charged to profit and loss account as per as-16.?

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3 Replies

praveen (Chartered Accountant) (6971 Points)
Replied 18 May 2014

The interest paid on loan till the date the asset is put to use has to be capitalised. SInce in your case the truck is not yet delivered you need to capitalize the expenditure.

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rajeev (nnnone) (222 Points)
Replied 18 May 2014

Thanks praveen for answer.

rajeev (nnnone) (222 Points)
Replied 18 May 2014

Praveen new query : Dear friends what would be the cost of debt of 9.5 % debenture( fvalue 100 ) , if these debentures are reedemable after 3 years and are currently quoting at 981.05 ?