A s 16 borrowing cost

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rohit laad (Querist)

29 August 2011 I have taken Term loan for a qualifing asset, interest on such loan is paid from my CC account. my question is whether I can capitalise interest on CC account as per AS 16 Borrowing cost.

please suggest. asap.

thanks in advance..

CA Navin Jain

CA Navin Jain (Expert)

29 August 2011 yes, need to capitalize the interest as per AS-16

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rohit laad

rohit laad (Querist)

29 August 2011 Thanks Mr. Jain, further it is not yet cleared to me whether I can capitalise Interst of both Term Loan and CC account. As I am already capitalising interst on TL, as per your opinion interest on CC account should have to be capitalize.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

29 August 2011 U can't capitalize interest on current account in the cited issue.

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rohit laad

rohit laad (Querist)

29 August 2011 Thanks sir..

CA Ravi Sisodia

CA Ravi Sisodia (Expert)

29 August 2011 interest on current account can't capitalize becouse it is not related with qualifying assets.

CA Navin Jain

CA Navin Jain (Expert)

30 August 2011 Your first query was not cleared, you was asking whether interest on term loan has been paid from CC account to be capitalized or not.

In the case if term loan has been taken for qualify assets and interest on term loan has been paid through CC Account then such interest would be capitalized.

And Interest on CC account would not be capitalized since CC Account is not used for any special purpose.

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