Accounts

Others 486 views 1 replies

HI,

whether interest paid on loan taken for  "purchase  of land",

which is held as "stock in trade"  will be  capitalized to the value of stock or not?

Replies (1)

No, only in case of qualifying asset which takes substantial period of time to gets itself ready for it's intended use, the interest during this period is capitalised as per AS-16. So in ur case interest will be treated as revenue expenditure which can be claimed from business income & cannot be added to stock valuation as inventories (stock-in-trade) is not a qualifying asset at all.


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