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AS-10 Cost of Fixed Assets

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Rajat (Querist)
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06 September 2008 I heard that, till the asset is put to commercial use all the cost (including interest cost on borrowed fund) has to be capitalized and included in cost of asset

If its true..Will the Trial Run expense be included in cost of machinery.

Or will trial run expense be treated as revenue expenditure-ordinary but exceptional and debited to P&L a/c

*** Trial Expense includes direct material, direct labour, direct overheads etc***

CMA Jitendra Singh

CMA Jitendra Singh (Expert)
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06 September 2008 If trial run expenses are huge & considerable than better capitalize or else charge to P& L

CA MOHIT VAATS

CA MOHIT VAATS (Expert)
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07 September 2008 Yes, That will include in the cost of machinery... As per AS 10

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