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Borrowing cost capitalised.

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(Querist)
13 July 2011 Hi,
Can anyone tell me whether to capitalise interest on specific loan amount taken to purchase a vehicle if the order was placed with the dealer and the car was not delivered for two months.
Amount of the vehicle was already paid to the dealer.
Interest was regularly paid to the bank.
Will this asset be called as a qualifying asset under AS16.
Reply ASAP.
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CA Navin Jain

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CA Navin Jain (Expert)
13 July 2011 in your case interest not be capitalised.
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ABHISEK TOSNIWAL

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ABHISEK TOSNIWAL (Expert)
13 July 2011 Dear Arpit,

The asset you are talking about would not come in the category of Qualifying Asset (qualifying asset is an asset which takes substantial period of time for its use or sale). so the interest component would not be capitalised.

Regards
Abhisek Tosniwal
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