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.
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
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
- Tax on Deemed Capital Gain
- Type of Capital Gain
- F & O PROFIT REPORTING FOR AY 2026-27
- Regarding ITR filing with more value than showing in AIS/TIS
- Exiting partner in partnership firm in gst portal
- TAX AUDIT QUESTION
- TDS _Long term Capital Gain ref.sec 214 Table 2
- Banking Related Issue
- Average Cost Of High Quality Diamonds
- ITR-3 File/Error Found
- TDS offline utility
- TDS on rent received on hardship compensation being rent on redevelopment of building
- Housing Society-ITR5
- TDS on Rent received on redevelopment of building
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
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
