Depreciation
This query is : Resolved
24 May 2011
Dear all,
Suppose i bough a machinery worth rs 1000000 from the Bank borrowing say 8 % loan. it means annual interest is to be 80000. But i have not put to use the machinery into the production during the year. How can i show the interest amount in my financial statments. should the interest amount be capitalised?. How can i claim depreciation at which amount of 10 lakhs?
Thanks & Regards
Ashish h tiwari
(MBA, IPCC)
Suppose i bough a machinery worth rs 1000000 from the Bank borrowing say 8 % loan. it means annual interest is to be 80000. But i have not put to use the machinery into the production during the year. How can i show the interest amount in my financial statments. should the interest amount be capitalised?. How can i claim depreciation at which amount of 10 lakhs?
Thanks & Regards
Ashish h tiwari
(MBA, IPCC)
24 May 2011
Interest amount can be capitalized if the loan is taken after establishment of business but before commencement of the business and the amount of interest paid in this period can only be capitalized.
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