Borrowing Cost

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Querist : Anonymous

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Querist : Anonymous (Querist)
16 February 2011 whether interest paid on loan taken for purchaseing of machinery for expancion of business, is to be capitalised or to be taken to revenue till the time the machinery is actual put to use?

16 February 2011 as per AS-16 interest cost up to put to use of assets should be capitalise.
after put to use of assets interest cost should be treated as revenue and transfer to P/L a/c.


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