Accounting for bank Processing cost

hello everyone...

i want to know how to treat bank loan processing cost which is incurred for purchasing a capital asset.

and specifically i want to know if the amount has not been utilised till year end but bank has already charged us full amount of charges.

thank you

Replies (3)

Hi Dhaval,

If it is assumed that the Loan is taken for business purpose, then Loan Processing charges are "Allowable Expenditures".

Simply debit that charges to P & L  A/c.

That charges should be capitalized by adding in the cost as up to installation all expenses incurred over that assets are to be capitalized.

Originally posted by :Rajesh
" That charges should be capitalized by adding in the cost as up to installation all expenses incurred over that assets are to be capitalized. "


 

Mr. Rajesh i appreciate you replied to my question.....even i agree with you tat it should be capitalised...but i have further question which i can explain it to you by giving an example....

E.g. i have acquired a loan of ruppees 1 crore for buying Machines... for which bank has charged me 5 lakhs as charges which i have already paid...now in case till year end i have utilised only 60 lakhs ruppees for buying 5 different machines..... further 20 lakhs for another 2 machines at some other date and 20 lakhs are still unutilised....then in this case how wil i apportion my 5 lakhs ruppees...my main weight is on apportionment of expense...i get confused with apportionment of  expenses related to this unutilised money

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 07 September 2026
CA Articles

Kothari Jain Patil & Chartered Accountants

Pune

CA Inter

View Details
Company
ARTICLESHIP 01 September 2026
Articles

Saini Pati Shah & Co LLP, Chartered Accountants

Mumbai

CA Foundation

View Details
Company
21 August 2026
Finance Manager

Resollect Technologies Pvt Ltd

Mumbai

CA

View Details
Company
ARTICLESHIP 24 August 2026
Chartered Accountant Articles

Rohit KC Jain & Co

New Delhi

CA Inter

View Details
Company
24 August 2026
Semi-Qualified CA/CA Finalist - Tax, GST, Audit & Accounts

Bharat Shah & Associates

Mumbai

CA Inter

View Details
Company
11 August 2026
COMPLIANCE EXECUTIVE

YMW COMPLIANCE SERVICES LLP

Others

CA Final

View Details
Company
ARTICLESHIP 26 August 2026
Article Assistant

ANIVESH CONSULTANTS LLP

Gurgaon

CA Inter

View Details
Company
Featured 19 August 2026
Chartered Accountant

apricus india

Pune

CA

View Details