Capitalisation of LC charges

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 April 2011 Daer All,

We imported a Ready to use Machinary, for which seller has a precondition of opening LC. Can we capitalise the LC opening charges as cost incurred for bringing the assets into its present condition???

Please suggest me corect treatment and why??

Regards
Prasanta.

RANGA SRINIVAS

RANGA SRINIVAS (Expert)

26 April 2011 Dear

LC charges paid to be capitalised please refer to guidance note on treatment of expenditure during construction period

regards

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

26 April 2011 The Council of ICAI, at its 280th meeting, held on August 7-9, 2008, has decided to withdraw the "Guidance Note on Treatment of Expenditure during Construction Period", as the same is no longer relevant in the present day context.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

26 April 2011 LC charges can be capitalized as per clause 9.1 of AS 10 ,since it will not come under the exclusions mentioned in clause 9.2 of the said standard.

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