Purchase of Property
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
18 December 2010
Even the Interest Paid on Loan taken for the purchase of property should be capitalised?
18 December 2010
It depends upon case to case. If the asset is ready to use at the time of purchase than it will be charged to revenue other wise we should see whether the asset in question meet the criteria of qualifying asset.
Qualifying Asset
1. Assets generally take 12 months or more for construction or condition to use.
2. Future economic benefits.
If asset is a qualifying asset than interest cost will be capitalized otherwise expense off.
Qualifying Asset
1. Assets generally take 12 months or more for construction or condition to use.
2. Future economic benefits.
If asset is a qualifying asset than interest cost will be capitalized otherwise expense off.
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