Finance charges under lease with ref. to AS - 16
This query is : Resolved
12 November 2009
Under A S - 16, borrowing cost includes the finance charges under Finance lease. Also, BC can be capitalised only if an asset is QA.
However, as per AS - 19, there is no such example or statement is provided.
Please let me know any example or case where finance charges of an leased asset under finance lease can be clubbed in the asset cost.
However, as per AS - 19, there is no such example or statement is provided.
Please let me know any example or case where finance charges of an leased asset under finance lease can be clubbed in the asset cost.
shakuntala chhangani
(Expert)
13 November 2009
Hi Abhishek, good question. Para 4 gives u the examples of borrowing costs. as per AS 16 borrowing cost can be capitalised till the time asset is ready for commercial use.Once the asset is ready for intended use, then the borrowing cost will be dr. to P/L A/c. In case of finance lease, normally, the ready to use assets are taken therefore there is no question of capitalisation of finance charges as it will then be considered as revenue exp. Thanks and regards,
CA Shakuntala Chhangani
CA Shakuntala Chhangani
CA Ravi Sisodia
(Expert)
13 November 2009
See in M.P. VIJAY KUMAR Book
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Accounting treatment of AMC alongwith the purchase of Laptop
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Condonation Request sec 119(2) b -Enhancement Limit of Leave Exemption prior to AY 2023
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Transfer of Physical Stock Between Two Proprietorship Concerns
- Issuing of delivery challan by seller of goods
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- Taxation of crypto futures in India Fy 2026- 2027
- EPF ECR NEW RULES Sep 17th 2026
- WRONG GSTR7 ENTRIES ACCEPTED ERRONEOUSLY
- Tax on Amount transferred in HUF Account
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
