29 November 2013
one of our client is into a trading business of pulses nd cashew. they import it from south africa nd at the time of clearing due to shortage of warehouse. .they dnt clear it from port or cfs warehouse. ...so all the additional cost of keeping goods there should be included in cost of inventory. ...and also the cost of container *(detention charges ) to be included in inventory. it is our fault that we r nt clearing it..
hoping ans with reference.
29 November 2013
As per AS-2, the expenses which is incurred for the purpose of bringing the inventory to its present location and condition alone should be capitalised. Detention charges or demurage charges cannot satisfied the above condition. So, charge it off to revenue.
CAclubindia
