As 16 borrowing costs

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Querist : Anonymous

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Querist : Anonymous (Querist)
10 May 2017 If a company does not built a qualifying asset but it purchases a qualifying asset whether the borrowing costs incurred on it will be capitalized??
Pls solve my query

10 May 2017 The asset purchased will be put to use after purchase hence there is no need of any borrowing cost capitalized on it. Such interest has to be charged to revenue.

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Querist : Anonymous

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Querist : Anonymous (Querist)
10 May 2017 In present case machine has purchased on 1-6-2011 and put to use on 1-1-2012.they have capitalized interest for 7 months I.e between 2 dates mentioned above.why so??

10 May 2017 Interest can be capitalized only when machine requires erection and commissioning period of 7 months.


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